FTSE 100: 7553.32 ▼ -78.01 (-1.02%)
Wall Street suffered its worst trading day in eight months on Wednesday, with the S&P 500 and the Dow Jones notching their biggest one-day fall since 9 September, as investor hopes for tax cuts and other pro-business policies faded.
The Dow Jones Industrial Average fell 373 points, or 1.78%, to 20,607, the S&P 500 lost 44 points, or 1.82%, to 2,357 and the Nasdaq Composite dropped 159 points, or three 2.57%, to 6,011.
US stocks slumped amid reports former FBI chief James Comey said in a memo that US President Donald Trump had asked him to end a probe into former National Security Adviser Michael Flynn's ties with Russia.
The developments intensified doubts that Trump would be able to follow through on his promises for tax cuts, deregulation and fiscal stimulus.
Selling accelerated late in the afternoon of one of the busiest trading days in months and the three major indexes ended near session lows.
The financial sector closed down 3% while the technology sector fell 2.8%. Bank of America (BAC.N) plunged 5.9%, while JP Morgan (JPM.N) declined 3.8%.
Investors shifted aggressively into haven assets. Gold jumped 1.7% to $1,258 a troy ounce, while the yield on the 10-year Treasury skidded 0.114 percentage points to 2.212%.
In Asia, equities lost ground on Thursday in morning session, as US political turmoil accelerated with the appointment of a special counsel to take over the investigation into Russia's involvement in the US presidential election last year.
In Japan, the Nikkei 225 dropped 1.81%, weighed by a surge in the safe-haven yen. Across the Korean Strait, South Korea's Kospi shed 0.67%. Australia's S&P/ASX 200 lost 1.28%.
Hong Kong's Hang Seng Index was down 0.56%. On the mainland, the Shanghai Composite shed 0.32%, while the Shenzhen Composite was off 0.24%.