Quake-hit Japan in shares wipeout
A huge slump for Japanese shares sparked more losses in global markets amid fears that Friday's devastating earthquake and tsunami will derail the fragile recovery in the world's third largest economy.
London's FTSE 100 Index closed at a new three-month low and US markets were lower after Tokyo's Nikkei shed 6% and shares in major players from the country's industrial and electronics sectors sustained heavy losses.
It is thought the quake alone may have generated up to $22bn (£13.4bn) of damage while there were fears of disruption to factory output due to power shortages.
The crisis in Japan has added to investor nerves over the unrest in the Middle East and North Africa.
The FTSE 100, which spent much of the session close to its opening mark, finished 53 points, or 0.9%, lower after a poor start to trading in New York.
A number of Lloyd's of London insurers were among those sharply lower and Burberry shares dropped 4% as analysts calculated prospects of lost sales in one of its biggest markets.
Brent crude prices dropped to around $111 a barrel at one stage on expectations that weaker Japanese economic output will depress demand for crude. However, the price of liquefied natural gas leapt 7% - its highest since October 2008 as fears grew that imports to Britain would be hit as cargoes are diverted to Japan.
The prospect of higher gas prices saw shares in London alternative energy stocks jump, with coal-fired UK energy producer Drax up by 3%. Gas exploration giant BG Group was also up 4%.
But energy and mining engineering company Amec, which provides services to the nuclear sector, suffered a 2% drop.
Other big movers included Glasgow-based temporary power supplier Aggreko, which jumped 8% on expectations that its generators will be in demand across Japan.
The Bank of Japan sought to keep financial markets stable by injecting a record 15trn yen (£114.4bn) into money markets while easing monetary policy.
The central bank said: "The damage of the earthquake has been geographically widespread, and thus, for the time being, production is likely to decline."
Shares in carmakers were badly affected as the north-east is home to many factories. With manufacturers halting production after the quake, Toyota was down 8%, Honda 6% and Nissan 9.5%.
Companies related to nuclear-power also registered huge losses, with Hitachi, Toshiba and Mitsubishi Heavy Industries all lower.
However, construction-linked firms rose on Japan's rebuilding expectations.