Ladbrokes and William Hill, Britain’s biggest bookies, both jumped against a falling market on talk that Opap, the partly state-owned Greek gaming company, was about to move in on their turf with a bid.

Opap, the largest gaming company in Europe with a €6.5 billion (£5.4 billion) market value, has stated that it is keen to expand across Europe because its Greek monopoly on sports betting expires in 2020. William Hill, up 10¼p to 164¾p, and Stanleybet, a fellow British bookie, are both challenging this monopoly in Greece’s highest court. UBS yesterday raised William Hill from “sell” to “neutral”, saying that it had fallen far enough but noted that it had to refinance £1.2 billion of debt before it was due in March 2010. Ladbrokes rose 14p to 161p.

The FTSE 100 lost 130.69 points to 3874.99 as insurers were hit by the twin fear of weakening values of their mortgage-backed assets and rising commitments to fund people’s pensions under variable annuities.

These worries are particularly strong in the US, where Aviva and Prudential have been ramping up sales of guaranteed annuities in the past two years. US insurers experienced a second day of falls and Aviva, the owner of AmerUS, lost 59p to 292¾p and Prudential, the owner of Jackson Life, fell 48p to 246p.

Legal & General has the same annuity problem in the UK combined with worries over the value of its mortgage-backed assets, and it lost 9.4p to 60.3p.

Miners were also crumbling on growing fears over the solvency of US and European car manufacturers. Vedanta Resources fell 50¼p to 191.4p and Eurasian Natural Resources lost 32.35p to 191.4p. Xstrata dropped 80½p to 625p.

The gainers were the banks following shareholder approval for their bail-outs, with HBOS up 7.7p at 72p, Lloyds TSB up 6.8p at 125.3p and Royal Bank of Scotland up 3.7p at 46p. Barclays lost another 1.9p to 127.7p as disgruntled investors sold before the vote on its Middle Eastern rescue.

Fund managers came under attack after UBS initiated coverage on the sector with a bearish prediction that their earnings would fall by half over the next two years. It advised “sell” on BlueBay, down 30p at 105p, Aberdeen Asset Management, down 2p at 81p and New Star, up ½p to 24¼p. The fear of customer redemptions sent Ashmore down 18p to 104¼p, Man Group down 8¼p to 198½p and Schroders down 36p to 564p.

Battered retailers were revived by better-than-expected sales figures with Next up 40p to 970p, Kingfisher up 3.3p to 102.9p and Marks & Spencer up 6½p to 206½p.

IG Group, the spreadbetting company, lost 62¼p to 166p after announcing a sudden rise in bad debt.

Taylor Wimpey lost 0.58p to 8.71p after Fitch cut its rating and said that default was a “real possibility”. A debt-for-equity swap looked likely, it said, and liquidation was a possibility, although creditors would recover only 39 per cent of their money. Dresdner Kleinwort moved from “hold” at 9p to “sell” without a price target.

— New York: Stocks plunged again as investors’ deepening economic fears and a flight from risk left the S&P 500 index at its lowest since 1997 – down 54.15 at 752.45 – completing erasure of more than a decade of stock market gains. The Dow Jones industrial average closed down 444.99 at 7,552.29.

Explore Markets

• United States

• Europe

• Japan

• China

• Russia

• The Gulf

• India

• Africa

Times Recommends

• Gazprom brands Ukraine 'a barbarian' in gas row
• Services sector raises fears over UK jobless
• Retailers surge as profits survive sales plunge