The last thing an already fragile London market needed in the run-up to the outcome of today's meeting of the US Federal Reserve's open market committee and the end of the second quarter on Friday was a batch of heavyweight profits warnings from abroad.

But that was exactly what it got yesterday, as overnight news of a profits warning from US chipmaker Applied Micro Circuits was followed by some equally alarming news from Cap Gemini, the French IT services group. That news sent London's TMT (technology, media and telecom) stocks into another tail-spin, driving the Techmark 100 index down to a record low.

This news, plus a three-figure overnight slide by the Dow Jones Industrial Average, quickly drained any remaining confidence in the UK TMTs, which in turn eroded sentiment across the rest of the London market.

The FTSE 100 closed down 106.2, or 1.9 per cent, at 5,555.7, its lowest closing level since April 4.

The FTSE 250 lost 69.1, or 1.2 per cent, to 6,267.8, its lowest point since April 19 and the FTSE SmallCap 47.2, or 1.7 per cent, 2,953.2, also its lowest level since April 19.

But by far the worst individual performance came from the Techmark 100, which dropped 64.26, or 3.6 per cent, to a record low of 1,735.60. At its best, at the peak of the TMT frenzy in March last year, the Techmark 100 hit a record 5,743.

There was no shift in the market's expectations regarding the FOMC meeting. A 50 basis points reduction is expected by the market which is also looking for reassurance that any further weakening in the US economy will bring a ready response from the Fed which has already cut US interest rates five times this year, each by 50 basis points.

But there were few in London willing to bet heavily on the FTSE 100 rallying sufficiently to finish the second quarter above the crucial 5,633.7 level. If it does not close above that number it will have fallen for six consecutive quarters for the first time since 1973-74.

Although the FTSE 100 losers list was filled with TMT stocks there were some nasty falls too in the recently firm banking sector. Some dealers said the constant flow of profits warnings and bad news from the TMT areas, had not brought any basket cases, but as one put it: "You can't rule out some really bad news and that will hit the banks."