At the finish of a grim session in London's equity market yesterday, the FTSE 100 was left nursing a 183.5 fall at 5,850, its biggest single-day decline in both points and percentage terms since December 1st.

Although the index finished well above its session-low of 5,746.5, when it was down 287.1, the market's retreat wiped out all the big gains since the new year.

And the stock market pain extended right across the board with the FTSE 250 registering its first three-figure slide since October 8th and the SmallCap also being punished.

The 250 index settled 102.0 lower at 4,874.4, almost erasing its new year gains, while the SmallCap index dipped 31.2 to 2,108.6.

A revival of turmoil in Brazil and the resulting "flight to quality" - a shift out of equities and into gilts and bonds - was to blame for the selling pressure that engulfed global stock markets.

Sao Paulo's 7 per cent decline on Tuesday was followed by a 145 point slide in the Dow Jones Industrial Average overnight and a 4 per cent fall in the Hong Kong market.

The index hit its lowest point just before Wall Street opened for business with US investors, anticipating a big sell-off on Wall Street, apparently selling London and other European markets.