The response to New York's slide left the FT-SE 100 index down 66 points at 3,632.3, its lowest this year.
But the carnage seemed even more acute among the shares outside Footsie. The FT-SE 250 index crashed a telling 90.6 points to 4,201, its biggest fall since it was first published in October 1992.
Before it was launched the FT-SE International, the organisation responsible for the market indices, had for its own records kept tabs on the 250 index. Allowing for back calculations there were bigger slumps in October 1989 and during the 1987 crash.
The 250 index is now at its lowest since February when it started a record run which took it to 4,568.5 in April.
The slump caught many observers on the hop. Thoughts still linger that New York's stranglehold on London had ended. But the latest setback proves once again the wisdom of one of the stock market's oldest sayings: "When New York sneezes London catches a cold."
Even so, the economic ties between the two nations have been greatly reduced since the advent of the EU. But as New York is the world's largest market London, or any other market, is unable to completely ignore its influence.
However, it is worth recording that Footsie failed to follow the Dow Jones Average as it surged to new peaks, reaching 5,748.52 in May. So it could be argued there is already a yawning gap between the two markets.
The New York setback was also a heaven-sent opportunity for the jobbing community to get its books in the apple pie order it had for long dreamed about.
Many shares, particularly among the second and third liners and on AIM, were smashed as market makers took advantage of the opportunities New York provided.
There was not a great wave of selling; it was more a buyers' strike as most investors, big and small, sat on the sidelines letting the hysteria wash over them.
Shares with a big US exposure took the brunt of the blue chip assault with Pearson off 24p at 619p; Grand Metropolitan (suddenly no longer a bid candidate) 16p at 418p and Hanson 6p to 161p.
High flyers also got their wings singed. Next, the retailer, tumbled 33p to 507p and Dixons 21p to 516p. Daily Mail & General Trust "A" lost 140p to 1,295p and BTG, the old British Technology Group which has been mauled since it arrived in the FT-SE 250 index last week, gave up 128p to 1,625p.
Financial groups felt the strain as worries surfaced that market activity would dry up. Perpetual, the fund management group, lost 140p to 2,130p and Mercury Asset Management 41p to 894p.
Pharmaceuticals were back in the sick bay. British Biotech, at one time down to 1,900p, managed to claw its way back to 2,030p, a fall of only 10p but significantly 20p below its rights issue price.
The pounds 143.4m cash call closes today with the underwriters destined to take up much of the issue.
Attempts to get shares moving ahead usually failed. ABN Amro Hoare Govett put a 420p target on General Electric Co and watched the price fall from 365p to 357.5p.
But P&O put on 8p to 500p as Whitehall eased restrictions on cross channel ferry operations and break up hopes bobbed around.
BAA displayed its relaxation with the latest Civil Aviation Authority package with a 15p gain to 493p and Sun Life & Provincial edged ahead 2p to 221p on new business figures.
British Energy had another lacklustre session, off 3p (after 5p) at 91p. Although turnover, at almost 29 million, was the highest of the day it was dramatically below Monday's level.
Albert Fisher, following a City presentation and buy advice from Barclays de Zoete Wedd, managed to squeeze out a 0.75p gain to 44.25p and Blenheim, the exhibitions group, came to life, gaining 15p to 438p, on renewed speculation that United News & Media is about to strike. UNM fell 27p to 629p.
A trio of profit warnings added to the despair. Automotive Precision fell 22p to 108p; Hunting 34p to 143p and Tay Homes 25p to 121p.
Memory Corporation, the computer chips group, lost a further 13p to 45p and Intelligent Environments failed to draw support from a Teather & Greenwood buy note, falling 7p to 71p.
Hat Pin, a recruitment group specialising in advertising, will test the new issue market today when it arrives on AIM. Stockbroker Gerrard Vivian Gray placed 1.1 million shares at 68p. The cash is being used to expand the core business and developing a television production side, Red Door Productions. Once part of the Guidehouse Group, Hat Pin was the subject of a management buyout in 1991. Chairman Gay Haines, formerly Collett Dickenson Pearce, joined two years ago.
Umeco, an aerospace distribution specialist, shaded 2p to 211p. More than 1.5 million shares have been taken up by six institutions at 205p. Some 475,000 shares came from director Osman Abdullah. Last year Umeco produced profits of pounds 1.85m with pounds 2.5m expected this year.Reuse content