Britain's major share index has sunk to a 13-month low as a violent global sell-off in stock markets and spike in volatility shook investors.
London's FTSE 100 was down 1.9 per cent at 7,197 points by 2100 AEDT, having sunk to its lowest level since December 2016 in early deals.
It was set for its worst daily fall in 10 months as investors rushed out of equities, which have surged since the start of the year.
"There's a sense of relief that we finally have a meaningful correction, it's long overdue. We have been positioned for it for a while, so we can actually breathe again," said Christopher Peel, chief investment officer at Tavistock Wealth.
"This type of price action, where you have a correction as severe as it has been, is a great reminder to investors, traders and regulators that it's not all a one way bet," he added.
The stars of the past months' rally were the worst fallers on Tuesday.
Financials led the slide, taking 33 points off the index. HSBC, Prudential, Lloyds and Standard Chartered fell 2.0 to 2.6 per cent.
Asset managers also featured prominently among the worst-performing stocks as the global markets 'melt-up' reversed.
Investment trust Scottish Mortgage tumbled 4.8 per cent as the sell-off in US tech stocks took its toll on the fund, whose top holdings include Amazon and Tesla.
Asset managers Standard Life Aberdeen and Schroders and retail investment platform Hargreaves Lansdown fell 2.7 to 3 per cent.
Hedge fund firm Man Group was the biggest weight on the FTSE 250, its shares tumbling 4.7 per cent.
Oil majors BP and Royal Dutch Shell also took a sizeable chunk out of the index as the rout in equities sent crude prices tumbling.
Europe's main bourses - Germany's Dax and the Cac 40 in France - started down by as much as three per cent in early trading, leaving investors with little option but to seek the traditional refuges of gold.
