London's stock market, riding a wave on Monday when the two main FTSE indices, the 100 and All-Share, hit all-time highs, was hit hard and fast yesterday by Wall Street's about-turn overnight. That move saw the Dow Jones Industrial Average, up well over 200 points as London closed, suddenly go into reverse and end a net 53 points lower as technology and internet stocks, so recently booming, came under heavy fire.

Dealers in London were under no illusions about London's response. "There was no way we were going to stand in the way of a 320-point reversal in the Dow," said one market-maker. "It was cut the book and get out of the way, and that strategy proved to be the right one."

There were a handful of extremely short-lived attempts to try to get the leaders to rally, but these were quickly doused as sellers emerged whenever the buyers put their heads above the parapets.

When the curtain came down, the FTSE 100 was left with a 195.5 or 3 per cent fall at 6,319.8. At its worst, an hour after Wall Street came in and as the Dow gave up a modest early gain and dropped more than 70 points, the index was down 235.1. The pain in the equity market spread right across the board, with the FTSE 250 and SmallCap indices, which have been chased sharply higher since the start of the year, also suffering a severe setback.

The FTSE 250, which many observers had expected to challenge its intra-day record in the short term, posted a 100.0 fall at its lowest of the day, and finished 95.8 lower at 5,753.6. The FTSE SmallCap, meanwhile closed down 16.6 at 2,473.0.