Market Report: Plunge leads to bad day at the office for Regus

As turmoil returned to the markets yesterday, with the FTSE 100 taking its biggest hit in a single session since November 2008, Regus was one of the worst performers in the wake of despondent City scribblers slashing the office provider's estimates.

The group plummeted 15.79 per cent, or 12.6p, to 67.2p on the mid-tier index after both Goldman Sachs and HSBC said they now believed its earnings over the next few years would be significantly lower than previously expected.

The former took the company off its "buy list", downgraded its rating to "neutral" and cut its earnings-per-share (EPS) forecast for the year by 11 per cent, blaming "increased economic uncertainty, the possibility of recession in the US and Regus's very high levels of operational gearing".

HSBC's analysts, meanwhile, said they estimated the company's EPS for 2012 would be more than a quarter lower than their previous calculations, though they did keep their "overweight" rating. Nonetheless, they still warned investors that if the US does enter recession, Regus's earnings before interest, tax and amortisation could be as much as 50 per cent below their estimates.

With HSBC saying it remained "a de facto employment play", the group was not helped by the latest jobless claims figures from the US showing a higher-than-expected increase. This was by no means the only gloomy economic data coming out of the States yesterday, as the Philadelphia Federal Reserve Bank's business activity index fell to its weakest level since 2009.

It was yet more fuel for those downbeat over the prospects for the global economy, and Morgan Stanley said its latest forecasts showed "the US and the euro area hovering dangerously close to recession".

The FTSE 100 ended up having more than £60bn wiped off its stocks, as it plummeted 239.37 points to 5,092.23. With traders warning of "carnage" on the markets, the banks were leading the way, and Barclays and Royal Bank of Scotland both lost more than 11 per cent, retreating 19.95p to 154p and 2.8p to 21.95p respectively.

It was the same for the sector across Europe, as fears over the sovereign debt crisis intensified, while reports claiming the US Federal Reserve Bank was examining the US operations of a number of European banks did not help.

The miners refused to be left out of the slump, with Xstrata shifting down 110p to 972p. Always highly reactive to the growth prospects of China, the sector was knocked by Deutsche Bank chief economist Jun Ma's reducing his forecasts for the country, saying the "single most important shock to [its] economy will be the likely slowdown (or even recession) of the EU and US economies."

It was a move which caused concerns around Burberry as well, and the luxury retailer – which has been enjoying a strong performance in the country – closed 102p behind at 1,245p.

The technology sector was suffering a sell-off in the wake of disappointing figures from a number of its Stateside peers, with Sage slipping 13.9p to 231.7p while ARM Holdings was knocked back 35.8p to 478.7p.

Meanwhile, Autonomy slumped 129p to 1,429p before announcing after the bell it was involved in discussions with Hewlett-Packard over a potential offer from the US group. The software company has been the subject of numerous bid rumours for a while now, though its share price has fallen more than 20 per cent since June.

Not a single blue-chip stock managed to keep its head above water, with those near the top of the index generally those with defensive qualities, such as Imperial Tobacco (down 28p to 2,029p) and Centrica (down 4.4p to 296.2p).

Resolution spent a lot of the session in the blue, after Citi's Raghu Hariharan reiterated his "buy" rating on the insurance buyout vehicle. Saying its "exit phase has potentially been set in motion with the splitting of the UK business between the front and back book", the analyst calculated that in the case of an exit the group could be worth 414p a share, though it still closed 11.2p worse off at 260.4p.

Thomas Cook was the worst hit on the FTSE 250, diving 16.13 per cent, or 8.49p, to 44.16p, as the troubled tour operator reached a new record low.

Meanwhile, with the latest retail figures showing a negligible rise in sales of 0.2 per cent last month, Home Retail shifted down 8.5p to 124.7p. It had its advice cut to "sell" by Seymour Pierce, which suggested the company's problems may force it into a restructuring of its Argos business including a number of store closures.

Down on the small-cap index, Cineworld eased back 2p to 183p as the cinema operator revealed a drop in its first-half profits of more than 40 per cent.

Meanwhile, Gulf Keystone was driven down 18.5p to 125.5p on the Alternative Investment Market despite the explorer announcing a new oil find in Kurdistan.