It was another grim session for investors in London as the spectre of more earnings and revenue warnings continued to haunt a market clearly on the run, especially after Wall Street's latest steep declines.
A profits warning from Cable & Wireless crunched its stock price, and the FTSE 100 and Techmark 100 indices, and demolished any hopes that Monday's profits warning from Sweden's Ericsson was a "one-off".
"What now seems to be crystal clear is that the economic slowdown in the US, which has punched holes in the US TMTs, has already infected western Europe; it is not a comforting scenario," said a salesman at a big US investment bank.
The latest news from the US was not encouraging. The confidence-eroding numbers from Wall Street on Monday, which saw the Dow Jones Industrial Average drop 436 points, or 4.1 per cent, having been down 477 at worst, and the Nasdaq Composite slide below 2,000 to finish over 6 per cent lower, were not followed by a significant rally.
At the finish of the session the FTSE 100 posted a 105.8 decline at 5,720.7, its lowest closing level since December 1998 and a fall of 282.5, or 4.7 per cent over the past three trading days.
It was a similarly depressing day for the mid and smallcaps as well as the Techmark 100, which has borne the brunt of the market weakness over the past year as the TMT bubble burst so dramatically.
The FTSE 250 dropped 105.2, or 1.6 per cent, the FTSE SmallCap 66.5, or 2.1 per cent, to 3,026.9 and the Techmark 100 by 48.94, or 2.2 per cent, to a record low of 2,178.43.
While the FTSE 100 was always under pressure from the overnight slide in the Dow and Nasdaq and the ripple effect of the Ericsson warning, it was the Cable & Wireless profit warning, issued in mid-afternoon, that did the main damage.
Prior to that news, the telecoms had enjoyed an unusually positive session, led by Vodafone whose shares made good progress during the morning, and which, even after slowing in the afternoon, still managed to drive the company back to its previous position as the biggest capitalised company in the 100 index, just overtaking BP Amoco.
Turnover was 2.35 billion shares.
