An early jump into positive territory on the FTSE 100 has been short-lived, as insurance stocks dragged the index below the watershed 3700 mark.
Chief investment strategist with Global Partner Securities Peter Cardillo saidL "Unfortunately this market is psychologically sick.
"There are absolutely no buyers and sellers are having a field day. The market is discounting all sorts of negative scenarios and stocks are being trashed globally."
Insurance companies began shedding value after Aviva declared that the products market is getting more difficult.
Aviva has dropped a staggering 19.5% to just 393 points. Rival Prudential has dropped 15.5% to just 363 points while Legal & General fell to 92.5 points - a drop of 4.5%.
The FTSE 100 was 66 points weaker at 3676.10 after rising to 3,759 in early trade.
Oils are extending the losses and mining stocks have further weakened the blue-chip index. Sentiment was not helped by an overnight cut in the long-term debt ratings of German financial group Allianz by Moody's Investors Service.
