LONDON - The London stock market plunged in early trading on Monday, as investors digested the nationalisation of bank Bradford & Bingley and a US deal on a massive Wall Street bailout.
London's FTSE 100 index of leading shares dived 2.49 percent to 4,962.02 points in morning deals.
The government has announced the nationalisation of troubled lender Bradford & Bingley.
The bank's savings business -- its best asset with 20 billion pounds of savings and 2.7 million customers -- will be sold to Spanish bank Santander, while its mortgage book will be nationalised, the Treasury said.
Bank Abbey National, owned by Santander, will pay 612 million pounds in the deal.
Across the Atlantic, US lawmakers agreed over the weekend to a 700-billion-dollar bailout for debt-stricken Wall Street banks and sent the legislation aiming to stem the US financial crisis for Congress to start voting on Monday.
"There's an agreement in place for the 700-billion-dollar bailout but in this market, no one is taking any chances and we must wait until the vote to confirm it has passed," said City Index market strategist Joshua Raymond.
"Then we must see if it ticks all boxes for a recovery, and that means the market understanding how it is going to work fundamentally.
"This may take a little longer for us to gain a realistic picture of the markets' interpretation," added Raymond.