The blame for another miserable day in London's equity market lay squarely with two of the most influential groupings in terms of FTSE 100 weighting - the TMTs and the oil majors - with a little help from British Airways and Wall Street.

Market sentiment deteriorated as the session wore on, the FTSE 100 dropping through 5,900 and moving on quickly to slip below 5,800 and settle down 138.4, or 2.3 per cent, at 5,765.8, its heaviest fall in a single session since April 3rd.

The Techmark 100 took even more punishment in percentage terms, sliding 61.58, or 2.9 per cent, to 2,042.26. But there were some crumbs of comfort in the relatively resilient performances of the FTSE 250, which was only 11.1 off at 6,418.0, and the SmallCap, which dropped 5.5 to 3,078.1.

Behind the weakness in the TMTs, dealers said, was the aftermath of the record placing of Vodafone shares carried out on Wednesday by Goldman Sachs and UBS Warburg. The placing of £3.5 billion worth of stock, at 194p a share, while lauded for the speed and efficiency of its execution, was seen by dealers as mopping up liquidity.

And with the market aware of the massive overhang of Vodafone stock resulting from its past acquisitions, the fear among investors is that the stock price will remain vulnerable until the 3.6 billion shares, which will become sellable next month, are cleared. Vodafone fell below the 190p level yesterday, that alone accounting for almost 20 FTSE 100 points.

"The absorption of Wednesday's share placings has taken the wind out of FTSE 100's sails," was the view of one senior derivatives trader. "The prospect of a break above 6,000 looks unlikely; Vodafone is likely to remain a drag as future placings are predicted."

There were few problems for London with Wall Street's performance overnight.

But that picture changed too, when US markets opened yesterday. Some bleak economic news, including a much lower than expected NAPM survey on non-manufacturing and a higher than forecast reading of jobless claims, saw the Dow slide over 152 points and the Nasdaq dip over 60 points.