European equity markets rebounded this afternoon after Wall Street opened with only a moderate loss. But the stock market is still bruised after early declines and investor confidence looks fragile.
By 4 p.m., the FTSE 100 crept back over the 5,000 mark but is still down 1.2 per cent today. An earlier slide down to 4,895.9 cut some £40 billion from leading London shares.
The deep losses spread across a wide-range of major drugs, banks, oils and telecoms stocks - with the market in its worst slump since the global emerging markets crisis of late 1998.
Drugs giant GlaxoSmithKline (GSK) was among the biggest casualties, down 2.9 per cent, as so-called defensive stocks were dragged into the firing line. Liquid shares like GSK looked the easiest way to exit the ailing market.
Leading telecom shares were at multi-year lows, with Cable & Wireless down 2.7 per cent to 309p and British Telecom off 2.9 per cent to 342p.
Scottish Power was the biggest FTSE 100 loser, dropping 12 per cent to 422p, after issuing its second warning in nine months that US power price volatility would hit profits.
Stricken telecoms equipment firm Marconi was one of the few brighter features, bouncing 8.5 per cent to 32p, after weekend news that it was talking to banks on its long-term debt.
The FTSE 100 looked set to spend a nervous afternoon tracking Wall Street where the Dow Jones extended early double figure losses to around 90 points as business got underway.