Update: The FTSE 100 has suffered a steep fall but has clawed back some losses from a plunge at the open, after a volatile open to US markets saw signs the heavy sell-off is abating.
The UK blue-chip index was down 84 points, or 1.2%, at 7,251, but up from a low of 7,118, as US markets pared losses at the open.
After opening around 2.2% lower, the Dow Jones clawed back those losses and swung into gains, up 1.5% on the day.
That follows yesterday's historic 1,175-point drop, the biggest one-day points fall in history, a 4.6% slump that represents the index's biggest percentage drop since August 2011, while the broader S&P 500 suffered a similar fate, down 4.1%.
Global markets followed suit last night, with Japan's Nikkei 225 closing 4.7% lower, while Hong Kong's Hang Seng was down 5.1%.
That saw European markets open to heavy falls, although, like the FTSE 100, they are off their lows. The German DAX 30 is down 2.5% while France's CAC 40 is trading 2.4% lower.
Yesterday's heavy sell-off in US markets followed mounting investor nerves, with global markets having retreated from all-time highs.
The pace of the sell-off quickened on Friday, after strong US jobs data prompted investors to reassess the pace of interest rate rises from the Federal Reserve, before descending into panic in late US afternoon trading yesterday.
Global markets have now fallen 10% from their highs, placing the stock market sell-off firmly in 'correction' territory, though the drop is not yet heavy enough to be classed as a bear market.
'It looks to emanate from a perfect storm of reasons,' said Mike van Dulken, head of research at Accendo Markets.
'A strong 2017 rally extending into January, low volatility, low interest rates, over-optimism and complacency, over-leverage and financial engineering, all coming to a head as investors react to the possibility of higher/faster interest rates with bond yields creeping higher to jeopardise the current market situation.'
Michael Hewson, chief market analyst at CMC Markets UK, said the stock market falls had been 'a long time coming'.
'At the end of last year margin debt levels on US stocks were at record highs, helping fuel the rise we've seen in the last few months,' he said.
'The sell-off in the last few days is likely to reverse the trend, and potentially accelerate it further, particularly if investors start to unwind it over concerns that we could fall further, which seems likely if events in Asia this morning are any guide.'
On the FTSE 100, only a handful of stocks escaped losses, with miners among those to make small gains.
The top-performing Scottish Mortgage (SMT) investment trust, the FTSE 100's only closed-end fund, was among the heaviest fallers, slumping 3.6% to 428.4p.
The FTSE 250 staged a similar recovery from lows, down 1.6% on the day, having opened 2.3% lower, while the FTSE Small Cap index was down 2%.