Shares have continued to plummet worldwide as panic spreads over fears of a global recession.

The FTSE 100 ended the day 381.7 points down at 3932.1, almost 9 per cent lower, having hit 3874 during the session. This week's turbulence is the worst since the 1987 crash and has seen £250 billion wiped off the value of UK shares since Monday.

On Wall Street, the Dow Jones Industrial Average shed almost 700 points in early trading before ending a wild session 128 points down after investors went in search of bargains among cut-price stocks.

European stock exchanges trimmed earlier losses and in Germany, the Dax finished 432.0 down at 4454.9 while France's Cac 40 was 324.9 lower at 3117.7.

Trading was halted on stock markets in Iceland, Russia, Austria, Indonesia, Romania and Ukraine as a result of the share price falls.

In Washington, President George W Bush implored Americans to remain confident and promised to restore stability in the face of a global stock market panic.

He said: "This uncertainty has led to anxiety among our people. And that is understandable, that anxiety can feed anxiety, and that can make it hard to see all that is being done to solve the problem."

In London, banks bore the brunt of the losses, with Barclays down 34.25p to 207.5p, Halifax Bank Of Scotland 29.25p lower at 124.25p, Lloyds TSB down 22.5p at 189.5p and Royal Bank of Scotland down 24.25p at 71.75p.

A number of other financial stocks were lower amid the recession fears.

Insurance and savings giants Legal & General and Prudential were big casualties amid fears for the sector's solvency position. The shares were off 14.3p to 74.7p and 44.25p to 378.25p respectively.

Car insurance group Admiral was among the fallers, despite reporting strong trading for the quarter to the end of September. Shares were down 2 per cent or 19.5p to 880p, with analysts noting continued pressure on margins and growth at the company's Confused.com comparison website.

Meanwhile, the prospect of weaker economic growth meant miners were under heavy selling pressure, with Rio Tinto down 326p at 2424p and Xstrata off 164p at 1223p. Among other heavy fallers, BT Group slid 17.2p to 136.1p.

Retailers were also joining the slide, with Marks & Spencer down 8.75p to 218p, fashion chain Next 37.5p lower at 947.5p and B&Q owner Kingfisher 9.5p cheaper at 120.1p.

Even with oil prices falling towards the 80 dollar a mark, fuel-hungry British Airways was a big loser, down 12% or 15.1p to 109.9p as investors fretted over the company's trading outlook.

The picture was a bit better in the FTSE 250 Index, with heavily-sold broadcaster ITV adding 1.5p to 37.5p amid speculation the current woes could lead to mergers within the industry.

Britain's biggest pub chain Punch Taverns also added 0.25p to 161.25p after rumours that the collapse of Icelandic Kaupthing had removed a short-seller from the market. But housebuilder Barratt Developments was among the firms in the red, down 8.5p to 83.25p.

The sole FTSE winner was media group Thomson Reuters which edged up 1p to 1101p.

The four biggest losers were Schroders, down 229 to 680p, Royal Bank of Scotland down 24.3p to 71.7p, HBOS down 29.3p to 124.2p and 3i Group, which closed down 97p at 500.5p.