SHOCK US jobs data sent the London market diving into the red yesterday as gloom gathered over trading floors.

America’s jobless figures for the month brought an end to five straight months of improvements, dampening hopes that the world’s largest economy was poised for recovery.

The FTSE 100 Index slumped more than two per cent to close down 106.4 points at 4234.3 as early falls were compounded by the grim news from across the Atlantic. Its falls were mirrored on Wall Street.

Concerns sent oil prices tumbling to their lowest level in a month, with a three per cent slump to $66 a barrel.

BP fell 9.05p to 480.95p, while in the mining sector Anglo American dropped 106.5p to 1726p and Rio Tinto fell 123p to 2035p.

In a day in which only four firms ended on the risers board, drinks firm Diageo topped the leaders with an 8p rise to 905p.

Fellow drinks firm SAB Miller fell back after earlier gains, losing 20p to 1260p as it said it was considering selling a stake in its South African business.

Vodafone lost 4p to 115.5p after it buried the hatchet with Carphone Warehouse and agreed to sell its contract mobiles across the chain’s outlets.

In the FTSE 250, shares in Greene King rose nearly three per cent, or 12.25p to 422.25p, after the firm said the recent warm weather had boosted trade. A broker upgrade also helped the pub group make gains.

But there was no such rise for retailer Game, which tumbled more than 13 per cent, or 22p to 142p, after detailing lacklustre trading figures for the first half of the year.

Back in the top flight, banks failed to end higher after early rises following a broker upgrade for Standard Chartered and confirmation of the formal appointment of acting chairman John Peace in the role. Shares in the bank fell 25p to 1155p.