Worries over the extent of American consumer spending over Thanksgiving weekend added to an earlier sharp reversal for mining stocks on European markets. Poor economic data, including a 26-year low for manufacturing activity within the United States, meant that global recession fears continued to haunt investors.

The Dow Jones Industrial Average was five per cent lower by the time of London's close and the FTSE 100 Index ended down 222.52 points at 4065.49.

The top flight index added 500 points last week but investors took the rally as an opportunity to book profits, particularly among volatile miners.

Platinum firm Lonmin led the fallers board after a drop of 18 per cent, or 1551/2p, to 6961/2p, while Kazakhmys fell 16 per cent or 423/4p to 217p and Vedanta Resources slid 951/2p to 516p.

As well as the weaker mining sector, most retail stocks were under pressure following the release of more poor sales data from John Lewis and expectations that Tesco will post its worst sales figures since the early 1990s today.

Stocks came off their lows towards the end of the session amid growing hopes that the Bank of England will slash another percentage point from interest rates later in the week.

With a poll of analysts ahead of Tesco's third quarter update pointing to UK like-for-like sales growth of only 1.9 per cent, shares in the grocery heavyweight closed two per cent, or 71/4p, lower at 288p. Sainsbury's fell 73/4p to 2791/4p and Bradford-based Morrisons – due to post figures later in the week – slipped 43/4p to 2373/4p.

The latest John Lewis weekly sales figures, which showed a 13 per cent drop in sales, unsettled shares in a number of mid-market firms.

Marks & Spencer lost two per cent, or 5p, to 2203/4p, while B&Q owner Kingfisher fell more than seven per cent, or 8.9p, to 110.6p and fashion chain Next declined 105p to 1003p, a drop of more than nine per cent.

In the FTSE 250 Index, Currys and PC World owner DSG International was 2p lower at 93/4p, while Debenhams fell half a penny to 233/4p.

One of the biggest gains of the session came from furniture retailer Land of Leather after the chain confirmed it had received preliminary takeover approaches.

It revealed a 47 per cent drop in sales orders for the past three months but this failed to prevent shares from jumping on the takeover interest – up 21/2p to 9p.

New Star Asset Management fell 43 per cent, or 6.01p to 7.99p, after it said it was in talks with its banks, fuelling speculation of a possible debt-for-equity swap.

Back in the top flight, London Stock Exchange shares were down 19p to 590p after The Times newspaper estimated the LSE had lost a quarter of its near monopoly in London business in equities to rival exchanges.

There were no Footsie risers during the session.

The biggest Footsie fallers were: Lonmin, down 1551/2p at 6961/2p; Kazakhmys off 423/4p at 217p and Vedanta Resources down 951/2p at 516p.