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The FTSE 100 failed to hold onto its position this morning as global falls of the stock markets and poor UK data brought the index down.

At 12:17 BST the index was down 2.14 per cent to 3,954.54.

The drop followed last night's 5.69 per cent fall for the Dow Jones on Wall Street and falls over night in Asia – with the Nikkei down 2.46 per cent and the Hang Seng down 3.85 per cent.

At one point the Tokyo index was down over seven per cent to its lowest since spring 2003.

In Europe this lunch time, the Dax was down 4.34 per cent and the Cac 40 fell 3.20 per cent.

In London losses were focussed on the miners, with Lonmin, Kazakhmys, Rio Tinto, Antofagasta and Fresnillo all seeing double digit drops.

Man Group led those making gains, ahead of Vodafone, AstraZeneca, 3i and Lloyds TSB.

Joshua Raymond, market strategist at City Index, said: "The markets quickly turned negative this morning following earlier small gains.

"This demonstrates just how tough it is to buy out there. We have seen further selling of commodity and oil sectors as concerns worsen over the potential effects a global recession could have on demand for metals.

"After three days trading we are now off over eight per cent and there is nothing out there currently that could spark a significant reversal from this trend."

He added: "We are facing a global recession and whilst the timings are never ideal, the impending Christmas period may only serve to exacerbate the situation."