There were powerful reasons behind the London market's latest struggle that saw the FTSE 100 once again dip below the 6,000 level and the rest of the main indices come under renewed downside pressure. The most potent was another spate of earnings confessions from top US companies headed by yet another revenue warning from Intel, the world's largest chip manufacturer. Also warning on earnings was National Semiconductor and Ameritrade, the online broker.

A closing 85.9 decline in the FTSE 100 drove the index decisively below the 6,000 level to 5,917.3, wiping out all but 58.6 of the big gains recorded earlier in the week, ahead of the Budget and the Bank of England's monetary policy committee (mpc) meeting, which left interest rates unchanged. In percentage terms it was the Techmark 100, which was the catalyst for the general market rally at the start of the week, that suffered most, sliding 77.93 to 2,308.74, although it retained a 60.33 gain over the five-day period. The index is down nearly 60 per cent from its March 2000 peak.

With the Intel news coming after Wall Street closed on Thursday and the likelihood that US markets would come under heavy fire at the opening yesterday, it was always going to be a down day for London.

Prior to the Intel damage, the Dow Jones Industrial Average had raced higher for the fifth consecutive session, boosted by the prospect of a further cut in US interest rates after the March 20th meeting of the US Federal Reserve's open market committee. The chances of a cut were seen to have been slightly dented by yesterday's non-farm payroll report that came in ahead of expectations.

Adding to the London market's discomfort was some worryingly weak manufacturing output data for January. Output dropped 0.9 per cent, its biggest monthly fall for more than three years, thanks to a big decline in mobile phone manufacturing.

The economics team at Dresdner Kleinwort Benson said: "Such a weak number could have policy implications if it is compounded by further soft numbers in the course of next month. There is a possibility that rates could be cut as early as the next mpc meeting on April 5th, even though by then we could be in the middle of an election campaign. However, we still favour the May meeting as the most likely date for a cut."

Turnover was 1.7 billion shares.