The London stock exchange has lost its early momentum after opening 2.5 percent up as investors hoped for a stimulus package to fight the panic over coronavirus.
The FTSE 100 gained more than 2.5% to reach 6758 at the opening, with oil giants BP and Royal Dutch Shell becoming the largest risers after adding 4% each.
By 10.30 am, it had dropped to 1.2% (6,663) after early gained lessened through the morning. The FTSE 250 is currently at 19,389, an increase of 0.30%.
Investors now expect central banks around the world to launch a coordinated effort to cut interest rates and shore up growth as part of a monetary stimulus package.
This morning, the Bank of England raised investors' hopes by vowing to take 'all necessary steps' to boost the economy.
'The Bank continues to monitor developments and is assessing its potential impacts on the global and UK economies and financial systems,' a spokesman said.
The Bank is working closely with HM Treasury and the FCA - as well as our international partners - to ensure all necessary steps are taken to protect financial and monetary stability.'
Investor attention in Britain will also turn to fresh Brexit negotiations, starting today, that aim to hammer out a trade deal by the end of the year to govern everything from aviation to fisheries and student exchanges.
It comes after British firms had more than £250billion wiped off their value last week amid the fallout from coronavirus.
As the first British death was confirmed, shares around the world plunged – triggering an alarming fall in the value of savers' pensions and investments.
The rout knocked £4.6trillion off global shares in just one week, as markets across Europe, Asia, and the US were hammered.
The FTSE 100 fell another 3.2 percent – or £54.2billion – on Friday to hit the lowest level since July 2016, shortly after the Brexit referendum.
It had shed 11.1 percent or £206.6billion of its value since markets opened last Monday morning.
The biggest casualty on Friday was travel giant TUI, which saw shares plunge 9.5 percent.
The weekly route on the FTSE 100 is the third biggest on record, after the credit crunch in 2008 and the Black Wednesday crash in 1987.
The wider FTSE 250 index dropped another 2.29 percent, or £8.2billion. It shed £44.4 billion – or 11.3 percent of its value – last week.
The vast majority of savers will have money tied up in FTSE 100 firms, either in pensions, investment funds or stock market ISAs.
Russ Mould, of investment firm AJ Bell, described it as a 'catastrophic day for investors' but said the reaction of financial markets was overblown.
Emma Wall, of Hargreaves Lansdown, said: 'The market can trigger our fight or flight instinct, but when the market has fallen, that is arguably the worst time to sell as you are selling at a less valuable price.'
She added that the 'best thing to do would be to try to ignore it'.
Elsewhere, Japan's Nikkei fell heavily overnight last Thursday over fears this summer's Olympics could be cancelled.
On Wall Street, the Dow Jones suffered its biggest daily points drop on record last Thursday, and fell another 3 percent on Friday.
Global shares have also clocked up their worst week since the financial crisis, losing a tenth of their value last week.
