The FTSE 100 had its worst day since last October while the FTSE 250 was also down on the day. The FTSE 100 lost 1.4 percent to 5,791.5 and the FTSE 250 was down 0.6 percent to 9,448.3.
The banking sector was mixed. Royal Bank of Scotland was up 2.7 percent to £19.09 when it announced that it would return £1 billion to shareholders in a buy-back rather than spend the money on a major acquisition. However Alliance & Leicester dropped 5 percent to £10.69 on investor displeasure over its full-year report, issued Monday.
Among gainers on the day was media group Emap gained 3.5 percent to 91¾p, its highest share price in several years, on the news that it will sell its French consumer titles and return part of the money to shareholders. Tobacco company BAT was up 2.3 percent to £13.59, its highest share price ever, on a strong full-year report. Oil and gas group Offshore Hydrocarbon Mapping advanced 18.3 percent to 103½p.
Other companies in the oil and gas sector did not fare so well on the day. CDS Oil & Gas dropped 19.4 percent to 6.25p on the news that its first test well for its Chaco Basin project in Paraguay did not produce the expected results. Elixir Petroleum, listed on Aim, was down 42.9 percent to 26¼p when it announced that explorations in the North Sea had failed to find commercially exploitable hydrocarbons.