A hefty sell-off on Wall Street overnight and again at the outset of US trading yesterday brought further pressure on London's equities. Adding to the weakness was disappointment that the rumoured deal in the UK insurance sector involved Scottish Widows and not one of the quoted stocks. Dealers said there had been widespread disappointment that the take-over news did not involve one of the big market stocks.

Wall Street's poor performance in recent sessions was being attributed to the increasing unease across global markets over the forthcoming meeting of the Federal Reserve's open market committee.

Although closing well off the session low, the FTSE 100 was still 55.9 lower at 6,496.5, extending the fall over the two days to 84.7.

The FTSE 250 closed 18.2 off at 5,986.9, while the FTSE SmallCap managed a minor gain, settling a net 1.1 ahead at 2,653.1.