FTSE dives 8 percent on growth fears

By Dominic Lau

LONDON (Reuters) - The top share index slid 8.2 percent by midday on Friday in a global sell-off in equities as investors feared government efforts to unclog liquidity strains would not avert a global recession.

By 11:35 a.m., the FTSE 100 was down 352.6 points at 3,961.2, below 4,000 for the first time in more than five years but above an early low of 3,874.0.

There was no gainer on the UK benchmark, which has lost more than 20 percent this week and is on track for its worst weekly loss since October 1987.

Banks were the top-weighted losers, with the FTSE 350 banks index shedding more than 11 percent.

Barclays, Royal Bank of Scotland, HSBC, HBOS, Lloyds TSB and Standard Chartered were down between 8.7 and 21.7 percent.

Wall Street plunged for a seventh straight session on Thursday as investors bet recent moves by authorities worldwide to thaw frozen credit markets would not be enough to avert a global recession. U.S. stock futures pointed to a sharply weaker start on Friday.

In Asia, Japan's Nikkei average slumped 9.6 percent -- its biggest one-day loss since the 1987 stock market crash.

"I am tempted to start buying some quality stocks which I think are particularly cheap at the moment, the likes of Smith & Nephew for example," said Tim Whitehead, head of portfolio services at Redmayne-Bentley.