Britain's blue chip benchmark tumbled 2.4% on the day to close 135 points lower as global markets continue to sink amid investor panic.
Banks and financial stocks weighed heavily, understandably, as the state of global equities remains in flux.
Deutsche Bank, the heavyweight German institution which sparked the panic on Monday, lost a huge chunk of yesterday’s rebound with a 7% plunge in shares this morning.
In London, FTSE100 closed 2.39% down at 5,536 - down almost 19% over the last year.
"Traders are losing faith in central banks’ ability to bring stability to their respective economics and stock markets," said David Madden at spreadbetter IG Index.
He notes that after outlining global outlook yesterday, now Fed chair Yellen has not ruled out negative interest rates.
"There is no suggestion that the US central bank is considering going down that route but it gives an indication of what tools are available. The very mention of negative rates will keep pressure on equity markets, and while the FTSE 100 is under 5600, its outlook will be bearish."
Shares in Hong Kong had a bad night after re-opening after the holiday, with the Hang Seng plunging almost 4% to 18, 546
Ariana Resources (LON:AAU) said its local partner Proccea was making “rapid progress” with the construction of the pair’s Kiziltepe Mine in Turkey and it remained on course for first gold pour in the second half of the year. Shares lifted 3.26% to 0.8875p.
Metal Tiger shares hardened 2.86% to 0.90p after the Botswana government formally agreed the transfer of 14 licences into a joint venture company it has with Australian firm MOD Resources (ASX:MOD).