More than £31 billion was wiped off the UK's biggest companies after blue-chip stocks took a fresh pounding on global recession fears.

After crude oil tumbled below $50 a barrel - its lowest level for almost two years - and metal prices fell hit mining stocks, the FTSE 100 Index closed 130.7 points down at 3875 - its lowest since the turmoil of mid-October, following a 5 per cent dive on Wednesday.

Insurers were hit hard by big sell-offs of their US counterparts, adding to general concerns over their capital strength in struggling equity markets.

The FTSE losers board was topped by Aviva, which dropped 20 per cent or 59p to 292.75p. Other double-digit losses were nursed by Legal & General, which shed 9.4p to 60.3p and Prudential, off 48p to 246p.

Falling aluminium and copper prices meanwhile dented heavyweight miners, led by Eurasian Natural Resources - off 32.35p at 191.4p - and Vedanta Resources, which was 50.25p lighter at 387.75p.

Crude oil also hit the lowest level for nearly two years, sinking below 50 dollars a barrel at one point as the slowdown fears lingered.

With black gold at little more than a third of July's record, BP shed 24p to 464p and Royal Dutch Shell lost 100p to 1486p.

Among the risers, many banking stocks recovered ground after a difficult previous session. Royal Bank of Scotland gained 3.7p to 46p on the day investors approved a £20 billion government-backed bail-out scheme by an overwhelming margin

HBOS was the leading FTSE riser with a gain of 7.7p to 72p a day after investors in Lloyds TSB - up 6.8p to 125.3p - approved a rescue takeover of the bank.

Barclays however proved the exception, dropping 1.9p to 127.7p after SocGen brokers lowered their price target on the stock.

Marks & Spencer was a notable riser as the retail sector recovered after falling heavily yesterday in the wake of more broker downgrades.

As M&S slashed prices in a one-day 20 per cent off sale, shares rose 3 per cent or 6.5p to 206.5p. Sentiment was also helped by better-than-expected figures showing a 0.1 per cent drop in sales volumes for October.

Fashion chain Next cheered 40p to 970p, B&Q owner Kingfisher rose 3.3p to 102.9p and Debenhams, which is also cutting prices this week, rose 1.5p to 25.25p - a gain of 6 per cent.

Car parts business Halfords also gained 7 per cent or 17.25p to 240.5p after half-year profits came in ahead of forecasts.

Winners: HBOS up 7.7p at 72p, RBS ahead 3.7p at 46p, Lloyds TSB up 6.8p at 125.3p and Next ahead 40p at 970p.

Losers: Aviva off 59p at 292.75p, Prudential off 48p at 246p, ENR down 32.25p at 191.4p and Legal & General which finished down 9.4p at 60.3p.

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