The FTSE 100 fell 0.41 per cent today after rallying on close following oil price falls to narrow earlier losses.
The index closed down 21.30 points to 5,150.60 now having lost over 20 per cent from its peak in October last year.
Admiral Group led the gains up 10.83 per cent on the day, while fellow insurer Royal&SunAlliance rose 6.18 per cent.
British Airways and TUI Travel climbed 6.88 per cent and 6.80 per cent respectively, while ICAP was up 8.80 per cent.
Building supplies merchant Wolseley led the drops falling 6.2 per cent on poor results.
Elsewhere the commodity stocks stumbled with falls recorded for Xstrata (down 4.89 per cent), Antofagasta (down 4.48 per cent), Petrofac (down 4.44 per cent), and Tullow Oil (down 3.96 per cent).
Outside the FTSE 100 Barratt Developments fell 9.43 per cent and PartyGaming was down 7.58 per cent.
BlueBay Asset Management rose 15.11 per cent, Trinity Mirror regained some lost ground up 10.50 and Wetherspoon was up 10.44 per cent on good sales figures pulling up fellow pub chains Punch Taverns and Mitchells & Butler.
Anthony Grech, market analyst at IG Index, said: "Wednesday morning saw the FTSE index slip back below 5100 to trade at its lowest levels in more than three years.
"Another battering for the price of oil is also helping to lift equities both in the UK and USA - going into the London close oil is a good ten dollars lower than it was on Tuesday morning, as inventory figures showed an unexpected surplus."
He added: "Although the last few hours have seen a recovery in stocks, we have of course been here many times before over the past few weeks only to see sentiment turn very sharply and send the indices plunging.
"The big test now for the FTSE is whether this 5,000 level can act as some sort of potential support. The past two months has seen around 20 per cent wiped off the value of UK blue chips, while this does not mean the worst is behind us, it certainly looks oversold in the short term and long overdue a bounce."