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The FTSE 100 plunged five per cent after opening on overnight falls in the Asian markets and fears of a worldwide recession.

After closing at 3883.36 on Friday, the index dropped sharply and was trading 184 points lower by 08:30 BST.

Hong Kong's Hang Seng index closed down 12 per cent and the Nikkei in Japan hit its lowest level since 1982.

Markets fell despite reassurances from the Japanese government that it is putting together a package of measures to support the country's stock market.

HBOS was among the few stocks still trading higher this morning and was up by 3.51 per cent.

Shares in HSBC, however, were hit by the turbulence in the Asian markets and fell by 9.77 per cent in early trading.

Fears of a global recession drove energy and mining stocks down. Rio Tinto stocks fell 8.21 per cent, BHP Billiton fell by eight per cent and Kazakhmys was down 7.62 per cent.

In Europe and the Dax and Cac 40 were down 4.15 per cent and 5.98 per cent respectively.

On the currency markets the pound continued its falls – dropping 1.977 per cent against the dollar to $1.587.

The euro was down 2.40 per cent against the dollar to $1.261.