A session of almost unremitting gloom in London's equity markets saw all the main indices under increasing downside pressure as the bad news continued to pile up on both sides of the Atlantic.
With every piece of bad news turning the screw on investors already suffering from the recent slide in stock markets, the faces of traders in the City's dealing rooms grew longer and longer as market activity focused almost exclusively on the sell side.
"We've reached the stage where buyers have almost completely disappeared; what we are seeing is a steady stream of selling orders from clients who feel they've taken enough punishment for the time being," said one dealer. "The City is an unhappy place at the moment and the job cuts can't be that far away; I've seen this happen before," he said grimly.
At the drop of the final curtain, the FTSE 100 index was left nursing its biggest one-day fall, in percentage terms, since October 1992. It closed a net 225.9, or 4.1 per cent, down at 5,314.8 to its lowest closing level since November 1998.
And there were similarly harrowing falls in the other indices; the FTSE 150 plunged 174.5, or 2.9 per cent, the FTSE SmallCap dropped 72.1, or 2.5 per cent, and the Techmark 100 slumped 112.0, or 5.7 per cent, to a low of 1,864.0.
The catalyst for the latest market malaise was a sudden confidence-sapping sequence of profit warnings from domestic companies. Adding considerably to those was another uncomfortably weak performance by Wall Street overnight and again at the outset of US trading yesterday, plus a gloomy monthly survey of industrial trends published by the Confederation of British Industry (CBI).
The CBI survey highlighted the decline in demand for manufactured goods and for output expectations. Some of the market's dwindling band of optimists said that the bad news could influence the Bank of England's monetary policy committee to reduce UK interest rates when it meets on April 4th and 5th.
There were a few crumbs of comfort in the retail sector after excellent results from Morrisons Supermarkets, Next and Selfridges. Turnover in equities was sharply higher than in recent sessions, reaching 2.7 billion shares.
