FTSE slumps 8.9 pct, capping worst week since 1987

* FTSE 100 slumps 8.9 pct; down over 24 pct for the week

* Financials plunge as bail-out, rate cuts fail to help

* Commodity shares drop on global recession fears

(For more on the financial crisis, click on [nCRISIS])

By Jon Hopkins

LONDON, Oct 10 (Reuters) - Britain's top share index ended 8.9 percent lower Friday contributing to a 24 percent slump for the week, the second biggest weekly fall ever, as investors ran scared from the spectre of a full global recession. The FTSE 100 .FTSE closed down 381.7 points at 3,932.1, its second biggest points loss ever, dropping below the 4,000 level for the first time in more than five years after its worst week since the crash of October 1987.

With another 90 billion pounds wiped off the FTSE 100's value Friday, there was just one gainer -- news and information provider Thomson Reuters (TRIL.L: Quote, Profile, Research, Stock Buzz), up a penny.

"The FTSE 100 went below 4,000 today, a level it first achieved in September 1996, that means if you invested in equities 12 years ago, you've seen no gain, which is unbelievable," said Manoj Ladwa, senior trader at ETX Capital. Banks were the top-weighted losers, with the FTSE 350 banks index .FTNMX8350 shedding more than 11.5 percent.

Barclays (BARC.L: Quote, Profile, Research, Stock Buzz), Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz), HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz), Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz) and Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz) were down between 8.1 percent and 25.3 percent.

Other financials also suffered, with fund managers Schroders (SDR.L: Quote, Profile, Research, Stock Buzz) down 5.2 percent, while 3i Group (III.L: Quote, Profile, Research, Stock Buzz) shed 16.2 percent, and insurers Legal & General (LGEN.L: Quote, Profile, Research, Stock Buzz) and Prudential (PRU.L: Quote, Profile, Research, Stock Buzz) lost 16.1 and 10.5 percent respectively.

Financials also headed another slide on Wall Street which sent the U.S. benchmark S&P 500 index below the 900 level for the first time in five years on fears tighter credit would spawn world recession.

President George W. Bush said on Friday the U.S. government was moving aggressively to address the financial markets crisis, but he acknowledged that anxiety was feeding on itself as stocks continued to plunge.

Finance ministers and central bankers from around the globe are in Washington this weekend for the annual meetings of the International Monetary Fund and World Bank on Oct. 11 to Oct. 13.

In addition, finance officials from the Group of Seven meet on Friday with the global economic melt-dowm at the top of everyone's agenda. "We are now witnessing the great crash of 2008. Certainly, there have been bigger one day falls in percentage terms, but the scale and unyielding nature of the sell off is unique," said David Evans, market analyst at BetOnMarkets.com.

"For days markets have continued to show signs of complete surrender, days that in the past may have become capitulation low points, yet the sell off has still continued," Evans added.