Oct. 6 (Bloomberg) -- U.K. stocks plummeted, in the biggest decline since Oct. 20, 1987, led by banks and mining companies on concern the credit crisis is deepening and as metals plunged. HBOS Plc and Antofagasta Plc fell.

The FTSE 100 Index dropped 391.06, or 7.9 percent, to 4,589.19 in London. The FTSE All-Share Index lost 7.2 percent and Ireland's ISEQ Index fell 9.9 percent.

``There is massive capitulation,'' said Tony Dolphin, director of strategy and economics at Henderson Global Investors in London, which manages about $125 billion. ``Confidence is very low and investors just do not want to bet against further falls.''

The FTSE 100 has lost 29 percent this year as the cost of borrowing money for banks surged, two lenders were nationalized, and consumer demand weakened. The British benchmark slumped 13 percent in the third quarter, a fifth consecutive quarterly decline and its poorest showing since the same period in 2002.

Investors sold banking shares across Europe today as BNP Paribas SA took control of Fortis, Germany was forced to rescue Hypo Real Estate Holding AG and governments pledged to protect depositors. They also reduced investments in metals amid concern a slowing economy will curb demand for commodities.

``Another Monday, another banking crisis,'' Manoj Ladwa, senior trader at ETX Capital in London, said. ``Black Mondays used to be a once-a-decade event. Now they're coming along more regularly than a London bus.''

HBOS, the U.K. bank that agreed to be bought by Lloyds TSB Group Plc, retreated 20 percent to 160.8 pence. Royal Bank of Scotland Group Plc, the U.K.'s second-biggest bank, fell 21 percent to 148.1 pence. Lloyds fell 11 percent to 259 pence.

Metals, Oil Drop

Antofagasta, which controls three copper mines in Chile, declined 18 percent to 313.75 pence. Lonmin Plc, the world's third-largest platinum producer, fell 7.4 percent to 1,575 pence. Copper tumbled to the lowest price since February 2007 on concern that the deepening credit crisis will stifle global growth and reduce metals demand.

Royal Dutch Shell Plc, Europe's biggest oil company, fell 7.7 percent to 1,502 pence. BP Plc, the second- largest, sank 8.1 percent to 429.75 pence.

New York crude-oil price tumbled as much as 5.1 percent to $89.07 a barrel, the first time it dipped below $90 since February. The contracts have dropped for four days now.

Anglo Irish Bank Corp. led Irish financial stocks lower, dropping 21 percent to 3.985 euros. The Irish Times reported Oct. 4 the government may charge banks an annual fee of 0.1 percent to 0.2 percent of their total deposits for guaranteeing their liabilities.

`Larger Bill'

``That would equate to 440-880 million euros ($598 million-$1.2 billion) a year for the six domestic banks in the scheme and is a larger bill that we would have thought,'' Scott Rankin, analyst at Davy stockbrokers in Dublin, wrote in a research note today.

Allied Irish Banks Plc, the country's biggest lender, fell 16 percent to 6.315 euros and Bank of Ireland Plc lost 15 percent to 4.13 euros. Irish Life and Permanent Plc declined 23 percent to 5 euros.

Last week the Irish parliament yesterday approved a 400 billion-euros ($550 billion) plan to protect deposits and borrowings of six local banks and stave off a financial collapse.

``The bears remain in control,'' said Nick Batsford, an analyst at Hobart Capital Markets in London who said technical indicators suggest the FTSE 100 may fall to 4,550. ``Although readings show an area of value in some industries, it takes a very brave man to go bottom fishing right now.''

The following stocks also rose or fell in U.K. and Irish markets. Stock symbols are in parentheses:

U.K. Companies:

Cookson Group Plc (CKSN LN) lost 54.5 pence, or 13 percent, to 381. The world's biggest maker of molds for steelmakers said trading in electronics was below the same period last year, the company said.

Creston Plc (CRE LN) rose 2.75 euros, or 5.8 percent, to 45. Cartesian Capital Group, a U.S. private-equity company, has written to Creston Plc about a possible buyout of the company, the Daily Telegraph reported, citing an unidentified person familiar with the matter.

Irish Companies:

Ryanair Holdings Plc (RYA ID) dropped 20 cents, or 8.8 percent, to 2.07 euros. Europe's biggest discount airline asked about 600 pilots to take unpaid leave over the winter months, the Sunday Times reported, citing a letter from the airline to staff.

To contact the reporters on this story: Alexis Xydias in London at axydias@bloomberg.net. Sarah Thompson in London at sthompson17@bloomberg.net.

Last Updated: October 6, 2008 12:26 EDT