The FTSE 100 index dived more than 60 points in early trading today. It took fright at Wall Street's big overnight sell-off after fresh signs the US economic slowdown is biting into corporate America.
The blue chip index was down 68 points or 1.2 per cent to 5,758.5 by 8 a.m. extending yesterday's 91 point slump to a two-year closing low and destined to head even lower.
London prices were depressed yesterday by yet another slide in the Nasdaq with concern that insurer Prudential is paying too much for American General adding to the overall gloom.
Technology shares faced another rocky ride today after the Nasdaq fell another 6.3 per cent last night. And with yesterday's profit warning from Swedish telecoms equipment maker Ericsson hanging over the market.
Among the technology stocks, chip-designer ARM Holdings was down 5.6 per cent while Colt Telecom was off 7.9 per cent.