The FTSE 100 has fallen more than 100 points, steadily losing ground throughout the session after US president Donald Trump threatened to escalate his trade dispute with China.
The UK blue-chip index fell 114 points, or 1.6%, to 7,267 points, after Trump threatened to hike tariffs on $200 billion of Chinese goods from 10% to 25% this Friday.
Trump tweeted on Sunday that the tariffs would rise this week following slow progress of trade talks between the two countries.
....of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!— Donald J. Trump (@realDonaldTrump) 5 May 2019
'Having spent most of this year rallying on the prospect that China-US trade talks would yield some form of compromise agreement, investors experienced a bit of a reality check over the weekend,' said Michael Hewson, chief market analyst at CMC Markets UK.
Miners, sensitive to China's economy given the country's status as the world's biggest metals consumer, were among the fallers.
Outside the FTSE 100, China-focused investment trusts fell after China's benchmark Shanghai Composite index dropped 5.6% on Monday following Trump's intervention.
Domino's Pizza (DOM) was among the 'mid-cap' fallers, down 2.2% at 255p as the pizza delivery firm said it no longer expected its international business to break even this year.
'Domino's are struggling to make their international business fire on all cylinders,' he said.
'Despite the group recruiting new management to drive an improvement overseas, sales are ticking backwards. The problems have been around for a while, but the group has not yet found the solutions.'
The group said it would wind down its Australian operations and was reviewing its US business.