Analysts have warned of another sustained sell-off, after the FTSE 100 tumbled 2.8% on Tuesday to close below the 6,000 mark once again.
The UK's blue chip index was dragged below 6,000 by significant falls in mining stocks, closing at 5,936 after its biggest daily fall this month.
The biggest faller in the index was beleaguered mining firm Glencore, which was criticised by prominent industry bodies last week for ignoring pre-emption rights in a recent share placing.
Glencore's shares closed the day 11.5% lower at 106p, compounding an annual fall in its share price of nearly 70%. The mining giant was closely followed by fellow commodity companies Anglo American and Antofagasta, which fell 6.9% and 7.4% respectively.
Barings' Burstow: Glencore faced 'Catch 22' but placing shows commitment
Chris Beauchamp, senior market analyst at IG, said the renewed falls in global markets could lead to another sell-off reminiscent of the 'Black Monday' scenario seen last month.
He said: "Steep falls across global markets have raised fears of another sustained sell-off. Once again, the FTSE 100's position as a hub for global commodity firms is proving its undoing.
"Raw materials have been hard hit too, and although Chinese manufacturing PMIs are out [today], it will take a very strong reading on the positive side before any rebound in prices can be contemplated."
The Telegraph also quotes his colleague Joshua Mahony saying: "There is a distinct possibility of yet another crash in financial markets.
"The steroids of monetary policy may have brought us to heights previously unseen in global markets, yet as the Fed and Bank of England begin to wean us off this artificial high, we are coming to find ourselves perilously exposed to another major sell-off."
Meanwhile, European markets have been hit by falls in the auto sector, after Volkswagen shed a fifth of its value following news the firm had cheated in US emissions tests.
VW set for Asian emissions probe after US recall; Shares drop 19%
Competitors such as Audi, Renault, Daimler and Porsche also suffered, as investors worried about potential breaches across the industry.
The German DAX closed 3.8% lower, while the French CAC and the Spanish IBEX fell 3.4% and 3.1%, respectively.
