There was more severe pain for London's equity market yesterday as investors took fright again at the prospect of a change of direction in US interest rates. Badly affected by Wall Street's latest sharp fall - the Dow Jones Industrial Average was looking increasingly disheartened and had fallen more than 150 points shortly after London traders shut up shop - the FTSE 100 finished the day only a shade above its session low.

It settled a net 134.6 off at 6,165.8, extending the decline over the past two trading sessions to 290.8, or 4.5 per cent - its lowest closing level since the end of March when the NATO campaign in the Balkans started. The other FTSE indices were also depressed, although nothing like as much as the blue-chip index. The FTSE All-Share retreated 55.9 or 1.9 per cent to 2,872.67, while the junior indices, the 250 and SmallCap, were similarly affected.