Disturbing news on inflation and growing nervousness over international earnings pushed London lower yesterday.
A drain on supply as Royal Bank of Scotland announced a £2 billion share placing gave the Footsie an extra kick down 89.3 to 5,427.8.
"It's like a doctor's packed waiting room out there," said one dejected dealer. "People have had their fingers bitten off and now they are sitting around waiting for the diagnosis."
Part of that evaluation was coming from the slew of results in the US, where 1,500 companies are reporting this week.
One of the biggest is Intel, which was to announce its figures after the US markets closed last night and several dealers picked up reports of big price cuts over the weekend as evidence that the news would not be good.
One UK dealer said: `If there were signs of a pick-up would they be cutting prices like that. The whole of the technology sector will just be a big problem if Intel disappoints.`
Technology and telecommunications stocks rattled lower, partly in anticipation of Intel, partly on caution about Nokia figures on Thursday and partly following weak results and a bearish outlook from electronics leader Philips of the Netherlands.
While the new economy stocks enjoyed yet another day in the doghouse, the old economy was not performing much better and a double blow sent the banking sector down more than 2 per cent.
First, Royal Bank of Scotland announced it was raising £2 billion through an open share placing to pay for the retail arm of Mellon Financial Corp of the US. As institutions avoided the rest of the sector to concentrate on Royal Bank, it was announced that headline inflation for June had remained at May's surprisingly high level of 2.4 per cent.
The news was seen as a blow to any remaining hopes of further UK interest rate cuts and was expected to focus attention on today's release of the minutes of the last meeting of the Bank of England's monetary policy committee.
Finally, there was a reluctance to deal ahead of today's testimony on the state of the US economy by Alan Greenspan, the chairman of the Federal Reserve.
