The bears picked the perfect day to launch a raid on London's stock market yesterday, with sharp sell-offs affecting stocks with far eastern associations in the face of currency worries.
London's equity market makers, already concerned about the overnight sell-off on the Hong Kong market, showed even more alarm with Wall Street's opening three-figure slide and took evasive action, chopping their quotations for British stocks.
As the dust settled in the marketplace, the FTSE was left nursing a whopping 125.5 loss at 4,865.8, its biggest points fall since the great crash of October 20th, 1987, when the index plunged over 250 points.
But in percentage terms, 2.5 per cent, the fall was much less severe, although still the biggest in a single session since October 5th, 1992. Dealers insisted, however, that the market slide had not been accompanied by any massive selling pressure in the market.
But market-makers adopted a defensive attitude about the prospects for the market next week.
Investors took crumbs of comfort from the performance of the market's second liners and smaller stocks. The FTSE Mid-250 index, which has outpaced the FTSE 100 for more than a week, put on a further 8.3 to 4,698.2, although it was well of its session high of 4,712.9.
