Britain's leading shares fell today but bounced off session lows after Wall Street put the brakes on a slide and turned higher, giving the benchmark FTSE 100 index much-needed direction.
The benchmark index closed down 50.2 points or one percent at 4,848.7, having earlier fallen over 2.2 percent to 4,772.2 as banks and drugs pulled blue-chips into the red.
On Wall Street stocks notched small gains in the late morning as investors regained some confidence.
An earlier quarter percentage point interest rate cut by the Bank of England failed to breath life into the UK market, which viewed the move as too little too late, dealers said.
Banks and drugs were the main FTSE fallers, taking 23 and 18 points respectively off the index with HSBC, HSBA, and Royal Bank of Scotland slipping.
Market volume was a moderate 1.9 billion shares with losers outstripping winners by around three to one.
Telecom stocks staged a late rally with Vodafone and British Telecommunications closing over four per cent higher.
BT's shares jumped to 398-1/2p after mm02 Plc, its soon-be demerged wireless arm, secured a 3.5 billion pound ($5.13 billion) loan.
There was concern it wouldn't be able to borrow to finance its expansion.
This week's positive analyst comments from Merrill Lynch and Cazenove also soothed investor nerves, while others noted that both stocks were among the sector's safest bets.