Shares in London slid remorselessly lower as the impact of the Asian saga on Britain and the US gained pressure.
The Hang Seng was down more than 1 per cent and Japan's Nikkei 225 fell more than 2 per cent before London opened.
Markets in the region fretted about the weakness of the Japanese yen against the dollar as the US currency moved further above 140 yen.
If that was not enough, British investors had the Chancellor of the Exchequer's public spending statement to fret about.
Consequently, the FTSE 100 index ended the day with a triple-digit loss and only 11 blue-chip stocks recording a gain over the day.
By comparison, the scenario had looked comparatively rosy at the previous close on Wednesday. Then, Wall Street was up as US Federal Reserve chairman, Mr Alan Greenspan discussed the prospects for the US economy. He said he might have to tighten monetary policy if domestic demand were to show few signs of slowing. But he added that "the rate of rise remains quite moderate overall".
The US government bond market took the report well although in late equity trading on Wednesday, the Dow Jones Industrial Average turned lower.
London followed suit yesterday heading down slowly in the morning and then gathering speed in the afternoon as it became apparent that Wall Street would be weak again.
By the close of British trading, the Dow was down more than 100 points and Footsie was off 134.9 at 5,852.5. The FTSE 250 fell 19.9 to 5,917.0, and the SmallCap 14.0 to 2,767.4.
Weakness was backed by slightly heavier turnover than the market has seen in the past few days. Total volume at 6 p.m. was 950 million shares with activity fairly evenly split between Footsie and non-Footsie stocks.
One problem was that, apart from Asia, there was little significant news to focus on yesterday.
The German stock market was closed for the Corpus Christi public holiday and, with the World Cup getting underway, there was muted interest in continental European equities.
No economic data were announced in Britain and, while there were some slightly inflationary jobless claims figures and retail sales data from the US, they did nothing to unsettle Treasury bonds.
Finally, there was Mr Gordon Brown's statement on public spending. His decision to raise the limit on public spending growth to 2 1/4 per cent, the top of the range projected in the budget, was seen by some economists as refreshing the prospect of more interest rate rises.
Nevertheless, the gilts market, which would be most sensitive to interest rate influences, remained buoyant after the chancellor sat down. If there was any worry, it was that a three-year public spending programme might be unsustainable.
Mr Simon Briscoe at Nikko Europe said: "The chancellor has put himself in a position where he is riding his luck. It will only take increased inflation, a manufacturing downturn or public sector strike and the strategy could be upset." Among the stocks to suffer yesterday were the financials as Halifax dropped 34p to 827p, Lloyds TSB slimmed 30p to 876p, Barclays slipped 33p to £17.07, NatWest cooled 15p to £11.05 and Norwich Union eased 21 1/2 p to 456p.
Abbey National also crumbled 46p to £10.56 and the Woolwich retreated 101/2p to 335 1/2p. Far East-linked companies were also affected with HSBC down 63p to £14.47 and Cable & Wireless 35p lower at 685p.
BAA lifted 12p to 700p, while British Airways, which climbed higher but descended on profit-taking, fell 1 1/2p ahead at 694p.
Meanwhile, shares in BAT Industries took a hit after a Florida jury ruled yesterday that the group's US subsidiary was responsible for the death of a man who died of lung cancer last year. BAT fell 26p to 580p, down more than 4 per cent.
