FTSE: 5,043.09 (–245.32) Mid-250: 9,877.44 (–388.56) Small Cap: 2,823.77 (–75.46)UK STOCKS tumbled the most in 2½ years yesterday, led by basic-resource producers and banks, as the Federal Reserve warned of "significant downside risks" to the US economy.

The benchmark FTSE 100 Index slid 4.7 per cent in London, the biggest drop since March 2009.

The gauge has fallen 17 per cent from this year’s high in February amid speculation the global economy is stalling.

The FTSE All-Share Index sank 4.5 per cent yesterday.

“Recession fear is in the market,” said Morten Kongshaug, chief equity analyst at Danske Bank in Copenhagen.

“The Fed actually did something good but the market wanted more. Following a big crisis, it takes a while before markets can think straight again,” he said.

The Fed will extend the average maturities of the Treasuries in its portfolio by purchasing $400 billion of long-term debt while selling an equal amount of shorter-term securities, the Federal Open Market Committee said after a two-day meeting on Wednesday.

The central bank said “there are significant downside risks to the economic outlook”.

Rio Tinto plummeted 11 per cent to 3,023p.

BHP Billiton, the world’s biggest mining company, slid 8.3 per cent to 1,731.5p.

Antofagasta, a Chilean copper miner, declined 13 per cent to 972.5p and Xstrata slid 9.6 per cent to 849.5p as copper fell 8 per cent and tin plunged as much as 9 per cent in London trading.

Burberry, the UK’s largest luxury-goods maker, retreated 9.8 per cent to 1,361p, the biggest drop since November 2008.

Shell BP slid 5 per cent to 384p and Royal Dutch Shell fell 3.4 per cent to 1,998.5p.

Petrofac declined 7.9 per cent to 1,257p as oil futures fell 6.6 per cent to $80.25 a barrel in New York.

SABMiller, the maker of Peroni and Grolsch beer, fell 6.3 per cent to 2,047p.

Lloyds Banking fell 10 per cent to 32.51p and Royal Bank of Scotland dropped 5.7 per cent to 22.05p as Moody’s Investors Service yesterday downgraded three US banks.

EasyJet, Europe’s second-biggest discount airline, rallied 9 per cent to 340p, the largest gain in two months, as the company said it would pay a dividend of 9p a share for the fiscal year ending in September. – (Bloomberg)