With Tokyo closed and New York operating on half steam because of Columbus Day and Yom Kippur, investors in London might have expected a nice quiet session yesterday.
Not a bit of it. After some sharp falls on Wall Street last Friday, UK equities were weaker from the start and the FTSE 100 lost all last week's hard-won gains.
Technology stocks took the biggest hit after Nasdaq followed up a three-digit loss last Friday with another significant decline in early trading yesterday. Footsie's four worst performers were Baltimore, Telewest, ARM Holdings and Logica, while the Techmark 100 index dropped 135.5 to 3,593.13.
Nor was the market helped by Vodafone, the UK market's biggest stock. It fell around 4 per cent amid talk it might buy a stake in Eircell, the Irish mobile phones group.
Meanwhile, another market heavyweight, the banking sector, was hit by concerns about its exposure to the telecoms sector. In all, just 11 FTSE 100 constituents were higher.
Tokyo markets might have been closed for the day, but there was still a kick in the teeth for sentiment from Japan, as life insurer Chiyoda Mutual Life filed for bankruptcy. And, as if the market didn't have enough to worry about, the oil price surged again on the back of violence in Israel and an unexpected cold snap in the US.
Market-makers attempted to head off institutional selling by marking down prices from the start. The FTSE 100 was never in positive territory all day and closed at 6,264.8, down 126.4.
Share price weakness was broadly based, with the FTSE 250 index dropping 92.7 to 6,576.7 and the SmallCap 29.5 to 3,356.2. There were modest signs of a switch into gilts on a "safe haven" basis, with the benchmark 10-year issue rising about two-thirds of a point.
Stock markets have been dogged since early September by concerns that the high oil price and slowing economies were eating into corporate profits.
One analyst with IBES reports that of the 447 UK companies to report results between January and September, 55 per cent have beaten consensus forecasts and 44 per cent have fallen short.
