By Marcus Leach
The UK's FTSE 100 index continued to fall amidst economic fears, as it dropped a further 3.2% as European markets continued the global shares sell off.
With investors concerned about the eurozone debt crisis and the strength of the US economic recovery markets throughout the world suffered heavily.
As well as the FTSE 100 being hit hard, Germany's Dax was down 3.5% and France's Cac 40 index fell 2.8%. Elsewhere Asian markets felt the full effect as Japan's main index was down 3.7% and Hong Kong's 4.6% lower.
This followed heavy falls in US shares on Wall Street on Thursday.
On Thursday European Commission President Jose Manuel Barroso warned that Italy and Spain may become embroiled in the problems caused by the spreading of the eurozone's sovereign debt crisis.
The US jobs data is set to be released on Friday, with investors awaiting the results to gauge the strength of the economy.
"Fear is the major theme," David Cohen of Action Economics told the BBC.
"People were cautiously optimistic that we would get back on track in the second half of the year. But with the US recovery stalling and the possible repercussions for the global economy, stock markets have been under pressure for a while."
In London some of the hardest hit were the banks, with Royal Bank of Scotland down 14%, and both Lloyds Banking Group and Barclays nearly 10% lower.
Genuine fears of a global economic downturn also hit commodity prices, as oil fell by $3.76 to $82.87 a barrel, the lowest price since November 2010.
The situation does not get any better, as on Thursday the US's Dow Jones index had its worst day since December 2008, closing down 512.76 points, or 4.3%, at 11,383.68.
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