What began as a mildly difficult day for London's equity market yesterday turned into a full scale rout as an early uptick in the telecoms ran out of steam and the banking sector suffered from the outbreak of the latest mortgage price war.

Furthermore, an end to the recently supportive performance by GlaxoSmithKline, one of the defensive heavyweights, removed another comfort zone from an increasingly vulnerable FTSE 100 index.

Adding to the increasing downside pressure affecting London stocks was a dismal opening by Wall Street, which came back from its President's Day holiday under hefty downside pressure.

The FTSE 100 index plunged below the 6,000 level to finish the day a net 113.9 lower at 5,980.1, its lowest closing level since October 1999, having dipped to 5,974.8 at one point.

And the other FTSE indices were also given a rough ride by the market, the FTSE 250 finishing 16.6 off at 6,700.2, having fallen to 6,697.4 at its worst.

The FTSE SmallCap just managed to retain a 0.9 gain at 3,260.2, but the Techmark 100 obviously vulnerable because of the setbacks in the TMT stocks, lost 29.79 to 2,475.60.

Tony Jackson, equity market strategist at Charterhouse Securities, said: "The collapse has been caused by the TMTs and after the false Greenspan rally." But he insisted: "I don't see the market going much lower from this point."

One of the market's leading chartists said: "It is all getting very nervous indeed; the charts say we are teetering on the brink. These are high risk areas. "If we close below the 6,000 level for three consecutive days it would constitute a decisive downwards break for the FTSE 100."

Questioned as to the next support level for the 100 index, he said 5,920 was a significant level.

The Dow Jones Industrial Average opened solidly enough but the Nasdaq posted a 60 points fall, following on from Friday's 5 per cent loss.