The FTSE 100 dropped more than 200 points, hovering just above the 5,000 mark as poor economic data saw shares tumble at market close.

The blue chip index shaved 4.5 per cent off its opening price to close at 5092.23, as weak US manufacturing data from the Philadelphia Federal Reserve hit stocks hard.

Concerns over interbank lending and European resolve to tackle the sovereign debt crisis, with the banking sector worst hit.

Barclays (BARC.L) saw its share price slump, dropping by 11.5 per cent to 154p and was joined at the bottom by Royal Bank of Scotland Group (RBS.L) which fell 11.3 per cent to 21.95p. Lloyds Banking Group (LLOY.L) was also at the bottom of the pile as share price dropped 9.3 per cent to 29.8p.

Other significant fallers were Xstrata (XTA.L), dropping 10.2 per cent to  972p, and its major investor Glencore International (GLEN.L), which fell 10 per cent to 355.45p.

There were no risers on what was again a grim Summer day for traders.

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