It was a tentative and defensive start to the week in London's equity market with dealers and investors preferring to step back on to the sidelines after last week's good performance.

The emergence of more cases of anthrax in the US over the weekend and the continuing strikes against terrorist targets in Afghanistan were being put forward by dealers as providing powerful excuses for avoiding the market yesterday.

So was the dearth of domestic and overseas economic data, although the rest of the week brings a flurry of news, particularly on the domestic front, including data on inflation, average earnings, unemployment, retail sales and M4 money supply and lending.

Adding to London's discomfort was a weak opening on Wall Street where the Dow Jones Industrial Average followed up Friday's 69 points fall with another three-figure decline not long into the US trading session.

Apart from the constant threat of bad news arising from the "war against terrorism", Wall Street was also bracing itself for a torrent of third quarter earnings reports from US companies. "Everyone knows these are going to be bad; it's simply a question of how bad and how much is already priced into the market," said one trader.

The FTSE 100 recorded a 78.2 decline at 5,067.3, having just escaped posting a three-figure decline at its worst of the session, when it fell 99.5 to 5,046.0.

It was the same story, albeit on a much smaller scale, for the rest of the main indices, with the exception of the Techmark 100, which benefited from confidence-boosting performances from stocks such as ARM Holdings and Marconi.

The latter was the second-best performer in the FTSE 250 and the second-heaviest traded stock in the market after issuing a reassuring trading update along with its second quarter numbers. ARM Holdings surprised on the upside with its third quarter results.

Dragging the 100 index lower was a wide variety of weak performers which included RollsRoyce, the aero-engines manufacturer as the market reacted to weekend reports of imminent and sizeable job losses in the wake of events on September 11th.

Vodafone topped the turnover table with 222 million shares changing hands, around 13 per cent of total volume.