Aviva, the insurer which reports third-quarter new sales figures tomorrow, fell 12 per cent to 218.75p after The Times reported on Saturday that it was reconsidering its £1 billion payout to with-profits policyholders to conserve capital.

Its share price has halved in just three weeks as there are mounting fears that life insurers will need to recapitalise to restore eroding capital reserves. Aviva has £26 billion of corporate bonds among its investments, which are vulnerable to defaults.

Aviva recently said it had solid capital under IGD rules for accounting for its solvency. Analysts at Shore Capital said this morning: "What would help the market would be additional disclosure on current default assumptions on its bonds and property books together with an indication of unrealised and realised losses to date. We sense that recent falls in the share price reflect concerns in the market on the commercial property book."

It also has £14 billion invested in commercial mortgages, many with a high loan-to-value ratio. Goldman Sachs believe its future dividend is vulnerable.

Banks, insurance companies and miners led another fall in the FTSE 100 today as Asian markets plunged while the soaring dollar and fear of a global recession drove down commodity prices.

HSBC, which experienced a massive fall in Hong Kong, where the Hang Seng index closed down nearly 13 per cent, was one of the worst performers in London, down 10 per cent at 625.75p. This comes after a 17 per cent fall last week amid fears that Hong Kong was tipping into recession and that HSBC's capital would need bolstering, particularly given its exposure to sub-prime mortgages in the US.

Standard Chartered, the bank which also has big exposure to Hong Kong and emerging markets, fell 7 per cent to 705p after Citigroup's Tom Rayner reiterated sell advice and said the bank would need $5 billion extra capital, including at least$3 billion in a rights issue. "Stronger capital ratios are likely to be necessary given slowing Asian economies and the recent rapid growth of the Wholesale loan book."

He cut his target price from £14 to 750p.

Schroders, the fund manager, lost 11 per cent to 530p following a Morgan Stanley downgrade on Friday, which predicted a war among the big banks for Europe's wealthy that would encourage redemptions from its fund.

Rio Tinto lost 10 per cent and BHP Billiton 9 per cent after Australia declared the two miners' rail lines open for the use of competitors. Liberum Capital predicted this would diminish the value to BHP of its takeover of Rio Tinto but not stop the deal.

Anglo American fell 10 per cent as it was named alongside Peter Hambro Mining as two of the most indebted of the UK miners.

In the FTSE 250 a profit warning from GKN sent its shares down 27 per cent to 85.5p.

In what will be bad news for engineers that service mining companies, Credit Suisse predicts this morning that $50bn of mining capital expenditure plans are at risk of being delayed in 2009. This represents 66 per cent of planned spending.

Rentokil Initial fell 12 per cent to 34p as Panmure Gordon halved its target price to 30p and warned that tougher trading was ahead just when it is undergoing radical restructuring under new management. "We therefore see operating earnings risk and the impact on the stock price will be exaggerated by the financial gearing."

Persimmon recovered after big falls after it wrote £600 million off its land bank. Dresdner Kleinwort said its statement was bad news for all housebuilders, particularly Barratt Developments which will be "under pressure to update the market earlier than mid-November on whether its £208 million of land impairments in the year to June 2008 are sufficient."

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