Not even a sharp decline in sterling, following the Bank of England quarterly inflation report, could rescue London's equity market from the latest sell-off on Wall Street.
The latter was hit again by fears of a sharp rise in US interest rates after next Tuesday's meeting of the Federal Reserve's open market committee, plus a big slide in Motorola shares after one of the influential US brokers downgraded the stock.
The New York Stock Exchange came under fire yesterday, with the Dow Jones posting a 163-point decline during London trading hours and the tech-laden Nasdaq Composite down over 200 points before staging a minor rally.
Earlier, the leading London stocks had struggled successfully to overcome Tuesday's US declines, which had seen the Dow off 66 points and the Nasdaq down 84.
The FTSE 100 index rose almost 60 points, responding to the Bank of England's latest quarterly inflation report.
That provided a degree of comfort to those adopting the view that UK rates are not far away from a cyclical peak.
However, by the close of trading, which saw activity in UK stocks begin to pick up from recently depressed levels, the FTSE 100 was 23.2 lower at 6,100.6. It had briefly dropped below the 6,100 level, hitting a session-low of 6,090.2.
The FTSE 250 index fell 50.0 to 6,222.6 after touching 6,214.7, while the SmallCap lost 9.4 to 3,191.2. The Techmark 100 was the main casualty of the Nasdaq sell-off, plummeting 160.6 to 3,474.20.
While the market was broadly lower, there was no shortage of winners in the front-line stocks, notably those affected by the sharp decline in sterling. The Bank of England's trade-weighted index fell 1.6 to 109.0.
British Airways and Sainsbury topped the winners list, followed by Billiton and Corus. The last two stocks especially were seen as large beneficiaries of currency changes.
