The FTSE 100 has fallen into the red as turmoil in Turkey continued to weigh on investor sentiment.
The Turkish lira continued to dive, slumping 5.7% against the pound after a 20% crash at the end of last week.
Turkey's economic problems were last Friday worsened when US president Donald Trump said he was doubling US tariffs on Turkish steel and aluminium.
The US and Turkey have been locked in a diplomatic stand-off over the detention of US church minister Andrew Brunson.
The return of a Turkish delegation from the US last week with no resolution to the detention last week accelerated the sell-off in the lira, which was already the world's worst performing currency this year.
Trades have rushed out of the lira over fears about the country's debt, which stands at 5.5% of the country's gross domestic product, with a large amount of it owed in foreign currency and due for refinancing soon. Inflation is running at 15%.
The fresh slump in Turkey's currency weighed on global markets, with the FTSE 100 dropping 36 points, or 0.5%, to 7,631.
Tui (TUIT) was the biggest faller on the index, down 3.5% at £15.11 as Turkey's problems weighed on the travel sector.
British Airways owner International Airlines Group (ICAG) was down 1.4% at 669.6p, EasyJet (EZJ) fell 1.2% to £15.33 and cruise operator Carnival (CCL) dropped 1% to £45.80. On the FTSE 250, Thomas Cook (TCG) slumped 1.9% to 86.2p.
Investment trusts exposed to Turkey were also heavy fallers. BlackRock Emerging Europe (BEEP) fell 4% to 305.4p and Baring Emerging Europe (BEE) was down 2.7% at 664.9p. The trusts hold 8% and 10% of their respective portfolios in Turkish stocks.
Turkey's problems also sparked a broder sell-off across emerging markets.
Fund group Ashmore (ASMH), which specialises in emerging markets, was among the heaviest fallers on the FTSE 250, down 5.1% at 338.8p.
Emerging market investment trusts were also hit. Among the heaviest fallers were:
- BlackRock Frontiers (BFRI) -2.6% at 150.5p;
- Pacific Assets (PACA) -2.1% at 276p;
- Aberdeen New India (ANII) -1.5% at 485p;
- Fidelity China Special Situations (FCSS) -1.5% at 229p;
- Templeton Emerging Markets (TEM) -1.4% at 712p.
Among 'small-cap' stocks, DP Eurasia (DPEU), which operates the Domino's Pizza franchise in Turkey, slumped 13.5% to 92.6p.
Chemring (CHG) was the heaviest faller on the index, down 14.4% at 202p as the defence contractor said an explosion at one of its UK factories could hit full-year profits by as much as £20 million.
The explosion at the company's Salisbury factory on Friday evening killed one person and injured another.