LONDON (AFP) - London shares closed lower on Monday as the FTSE suffered repurcussions from the global crisis caused by the filing of bankruptcy by US banking giant Lehman Brothers and Merrill Lynch's imminent purchase by Bank of America..

The FTSE index was down 3.92 percent to 5,204.20 points as investors dumped shares amid growing fears of global financial meltdown.

On a frenetic day Royal Bank of Scotland Group was the most traded stock, seeing 266 million units change hands, followed by HBOS, which saw 260 million shares switch owners.

Unsurprisingly, it was bankers and insurers who bore the brunt of the day's losses with Friends Provident topping the list, losing 17.6 pence -- or 17.85 percent -- to close on 81.

Banker HBOS followed, down 49.5 pence, -- or 17.6 percent -- to close on 232.5.

Rare gainers included Capita, up 17 pence -- or 2.42 percent -- to close at 719.5 and Thomas Cook who were up 4.75 pence -- or 1.89 percent -- at 255.5.

"Problems today are not focused on individual firms but are systemic, and whilst it is probably not the time to say anything concrete on the long-term future, there is a sense today that the financial landscape has changed irrevocably," economist Peter Dixon said, cited by Dow Jones Newswires.

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