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UK stocks dropped sharply by lunchtime on Thursday after the UK government confirmed an extension to the isolation period for those with coronavirus symptoms to 10 days from seven, following signs that a 'second wave' is underway in Europe.
Also weighing on the stock market was disappointment that the Federal Reserve didn't unveil any significant changes to its monetary policy to support markets.
By 1215, the UK's benchmark FTSE 100 index fell 1.87% to 6,016.82.
Lloyds Banking tumbled 8.3% to 26p on the news it swung to a loss in the first half of the year after setting aside £3.8bn to protect against a potential wave of loan losses and warned the outlook remained highly uncertain.
For the six months ended 30 June, the company reported a pre-tax loss of £602m compared with a profit of £2.9bn year-on-year.
Royal Dutch Shell dropped 2.6% to £11.51 despite reporting better than expected second quarter numbers. Analysts had forecast a loss but the oil producer achieved positive earnings.
BAE Systems was buoyed 3.7% to 495p despite the defence company warning that earnings would be lower than last year after reporting a fall in profit in the first half of the year. Investors were perhaps more pleased that the company 6resumed its dividend payments.
Rentokil Initial bounced 1.75% to 558p after it announced first-half revenue from disinfection services of £49m and said ongoing revenue climbed 1% to £1.3bn despite the crisis.
Anglo American fell 3.85% to £18.97 as the mining giant more than halved its interim dividend after reporting a slump in profit as coronavirus-led disruptions hurt production.
Mining group Evraz lost 5.1% to 284.4p as it warned of uncertainty around production and sales owing to turmoil in the oil and gas markets.
RSA Insurance headed 3.2% lower to 424.2p despite the group achieving a first-half record for underwriting performance which saw growth in profits of 33%. Statutory results at the insurer were hit by Covid-19 financial market impacts.
Man Group dipped 1.5% to 123.75p after it reported a fall in first-half funds under management as negative investment performance and net fund outflows weighed on results.
For the six months ended 30 June, pre-tax profit halved to $55m on-year as funds under management fell 8% to $108.3bn from 31 December.