Britain's blue chips sank 91 points lower to finish firmly in the red on Thursday with banking titan HSBC in focus.
FTSE100 closed at 6,859, down 1.31% with 7,000 now seeming a distant memory as Greece continues to scramble around looking to broker a deal before the latest debt deadline.
HSBC (LON:HSBA) shares lost 1.04% to 618.8p as it was revealed the scandal struck banking giant had been fined a record £27.8mln by Swiss authorities over money-laundering claims at the Swiss subsidiary.
It means the Swiss authorities will not now prosecute the group, it was reported.
HSBC agreed to the settlement after being told of charges being prepared against it in April this year.
"Greece’s day of reckoning is nearly upon us and traders can’t get out of the market fast enough. We are back to the bad old days of the eurozone debt crisis, when equity markets around Europe are selling off hard and fast," said David Madden, at IG Index.
Johnson Matthey (LON:JMAT), the world's largest maker of auto catalysts, was the biggest faller, shedding 5.26% to 3.331p.
Some analysts were worried about its debt levels, while others trimmed forecasts because the company is disposing of its research chemicals unit and booking higher pension service charges, while its metals unit has been weak.
While most areas of the business performed well, precious metal product sales fell 9% and underlying profit for the sector dropped 21% on weaker markets and the sale of its gold and silver refining business.
On the other side, Kingfisher (LON:KGF) was the biggest riser on the index after an upgrade to ‘neutral’ from ‘underperform’ by Bank of America Merrill Lynch. Shares were lifted 2.66% to stand at 377.9p.
Royal Mail (LON:RMG) shares nudged 0.66% higher having slipped earlier as the chancellor George Osborne revealed plans to sell off the government’s remaining 30% stake in Britain’s postal business.
The share sales will start this year, the Department for Business revealed.
Rothschild has been hired by the government to sell the Royal Mail shares, which are currently valued at around £1.5bn.
In the mid cap space, city traders continue to speculate that Paddy Power or private investors could table a 175p per share offer for Ladbrokes (LON:LAD).
Shares in Ladbrokes rose for a second straight day, climbing 2.62% to 125.5p.
Meanwhile, Moneysupermarket.com Group (LON:MONY) said the UK energy regulator was looking into whether to include it in a competition probe. Shares lost 9.9% to 275.8p.
In small caps, 88 Energy (LON:88E) said excellent drill results had been reported near to its Icewine site in Alaska. Shares added 34.48% to 0.975p.
Midatech (LON:MTPH) will significantly increase its footprint in the US and in cancer care with the acquisition of Nasdaq-listed DARA Biosciences for up to £19.5mln. Shares rose 1.46% to 295.25p.
Helium Special Situations Fund has increased its stake in Coms (LON:COMS) from less than 11% to more than 15%. Coms recently exited the telecoms business, selling a chunk of its business to Timico for £2.5mln. Shares in Coms jumped 12.5% to 0.675p.
A notable gainer was Churchill Mining (LON:CHL), up almost 73% to 41.5p. Churchill China’s shares shot up as the Indonesia government dropped its fraud claim in their legal battle over ownership of the East Kutai coal project.
Independent Oil & Gas (LON:IOG), up 44.44% to 13p. The company has instructed Darwin Strategic to sell 1.47mln shares at a premium price in order to raise funds. The shares will be sold at a price of 23.79p; the shares closed last night at 9p.