What began as a promising performance by London's equity market, with three of the main FTSE indices threatening to beat their closing records, ended with the market leaders on their knees and only the FTSE 250 able to claim a closing high. The finger of blame for the abrupt about-turn, which saw a gradual decline in the FTSE 100 turn into full-scale rout, was pointed at a rather sluggish performance by Wall Street, which followed up last Friday's move to another closing record with a poor showing yesterday.

The Dow Jones Industrial Average, up 27 points on Friday, was down around 40 points shortly after London closed yesterday.

Adding to London's late downturn was news that the government had instigated an investigation into the reason for mortgage lenders proving reluctant to pass on fully to borrowers the most recent cuts in domestic interest rates. The mortgage banks, which were among the market's best performers during the morning trading session - partly boosted by a positive note on the sector from Goldman Sachs - tumbled after news was made public, causing a sharp reversal in that sector.