The downgrade of the outlook on the US AAA credit rating sent the FTSE 100 sliding on Monday, with the blue chip index dropping 125.93 points to 5,870.08.

The closing level for the top index was the lowest closing level since 23 March, after Standard & Poor's downgraded its outlook on the US from 'stable' to 'negative'.

The credit rating agency said there was a one in three chance the rating could be downgraded within the next two years.

Rupert Watson, head of asset allocation at Skandia Investment Group, said, 'Global equities weakened significantly on the news, while gold rose to a new record.

'Moves in other asset classes were more muted, with bonds only slightly weaker and the US dollar little changed versus a basket of currencies.'

The move had a profound impact on the index with just two companies WPP and Serco showing any gains at the close of trading.

Marketing and advertising giant WPP (WPP.L) and outsourcer Serco (SRP.L) added 0.1 per cent to their closing share prices of 722p and 555.5p, respectively.

Miners Antofagasta (ANTO.L) and Anglo American (AAL.L) both saw share prices hit hard falling by 5 per cent to 1,504p and 2,983p, respectively.

Elsewhere insurers Resolution (RESL.L) and Aviva (AV.L) both saw share prices tumble. Resolution dropped 4.8 per cent to 294.7p following a downgrade to 'neutral' status from UBS. Aviva, meanwhile, shed 4.6 per cent to 414.7p. Listed hedge fund Man Group (EMG.L) also saw share price drop, falling 4.4 per cent to 239.7p.