Yesterday turned out to be a much watered down version of Tuesday's performance as the tech, media and telecom stocks continued to lose ground, eroding confidence across the board.
And with a few exceptions it was another poor session for a banking sector still suffering from the ripple effect of moves initiated by the Nationwide building society and the Halifax to start another mortgage price war. But it was noticeable that the lists of losers in the FTSE 250 and FTSE SmallCap indices were increasingly overloaded with TMT stocks as the session wore on.
Concerns about Wall Street's ability to hold up in the face of the global concerns about the vulnerability of the US economy was another factor behind the general lack of confidence in London.
Wall Street came in under heavy fire yesterday, the Dow Jones Industrial Average sliding just short of three figures minutes before London closed for the day, although it rallied strongly thereafter.
Behind the weakness on Wall Street was the latest inflation data, which showed the US consumer price index up 0.6 per cent in January, compared with a consensus forecast of 0.3 per cent.
That, along with the much stronger than expected producer price index announced late last week, awakened concerns that emerging inflationary pressures could head off any further US interest rate reductions. But London did manage a late revival, which brought the FTSE 100 back up to finish only 7.7 lower at 5,972.4.
Just before Wall Street opened for business, the 100 index fell away to a session low of 5,921.7, a rally that brought sighs of relief from worried brokers. The 5,920 level on the FTSE 100 has long been seen as a crucial support level.
"If we had gone below that number there were plenty of sellers lining up," said a salesman. The Techmark 100 lost 75.4 to close at 2,400.2.
It was not all bad news for London.
At the outset of trading and for the early part of the session the FTSE 100 moved back to within 1.1 points of the 6,000 level, boosted by news that the Bank of England's monetary policy committee voted 9-0 for a 25 basis points cut in UK interest rates after its February 7th-8th meeting.
