Britain's FTSE 100 share index has been led lower by the mining sector on persistent fears over falling Chinese demand and on concern that BHP Billiton might cut its dividend after writing down its US shale assets by $US7.2 billion ($A10.3 billion).
BHP Billiton stock fell 5.8 per cent and the writedown news raised expectations that it will be forced to cut its dividend for the first time in more than 25 years.
"In straitened times valuations tumble and then eventually you have to bite the bullet and take a hit on your balance sheet," City Index market analyst, Ken Odeluga, said.
Sector peer Anglo American was the biggest faller, however, down 9.5 per cent and reversing some of Thursday's gain.
Glencore, Antofagasta and Rio Tinto were down between about 4 per cent and 6 per cent, with the FTSE 350 Mining index the top sectoral decliner, dropping 4.8 per cent.
"(It's) the same toxic mix of indebtedness, being hit by weakening demand for their main (product) and of course the fact that many of them have not actually cut dividends," Odeluga said.
The sector has been hit by economic weakness in China, the largest consumer of metals, which has fired concerns over demand for commodities. Disappointing Chinese loans data on Friday was the latest set of figures to worry investors.
The blue-chip FTSE 100 index fell 1.1 per cent to 5,851.43 points by 0952 GMT, slightly outperforming the broader European market. The index is down about 6 per cent this year.
Oil and gas stocks were also in negative territory, as the market braced itself for more Iranian oil exports with Western sanctions expected to be lifted within days.
US crude oil futures dipped below $US30 per barrel, their lowest since November 2003.
BP and Royal Dutch Shell were down 2 per cent and 0.8 per cent respectively.
Bucking the trend, credit data company Experian gained 1.1 per cent after reporting a rise in third-quarter revenue at unchanged exchange rates, helped by strong growth in its North American and Latin American businesses.
Among mid-cap stocks, price comparison site Moneysupermarket plunged nearly 9 per cent after reporting a bigger-than-expected fourth-quarter contraction in its insurance unit.
