Lastminute leads the big hi-tech slide in London

The fallout from the sharp drop in the United States' Nasdaq stock market spilt over into hi-tech shares on this side of the Atlantic yesterday, where the index fell to its lowest since late January.

The fallout from the sharp drop in the United States' Nasdaq stock market spilt over into hi-tech shares on this side of the Atlantic yesterday, where the index fell to its lowest since late January.

While the FTSE-100 index of leading shares ended only slightly lower, the techMARK index dived nearly 9 per cent, shedding 351.7 points to end at 3,731.57.

A notable loser was lastminute.com, the online bucket shop, whose shares fell 27.5p to 195p - almost half its flotation price last month of 380p per share, and far below its high point of 555p, which it briefly touched on its first day on the market. Few of the technology stocks got off lightly: shares in Scoot.com plummeted 52 pence to 151p, while Freeserve, the free internet service provider part-owned by the Dixons Stores Group, got off relatively lightly, ending just 26.5p or 6 per cent lower at 431.5p.

The pattern of falling "new economy" technology shares and rising "old economy" shares in companies such as banks and retailers was repeated across Europe.

The abruptness of the fall left some hi-tech investors querying the logic behind the selling decisions. At the Motley Fool website, which offers financial chatrooms, one investor with the nom de plume "cheekychimp", wrote: "I didn't expect companies with a PER (price/earnings ratio) of 450 to stay at that rate, so I sold some and kept some. What I find confusing is that all my other holdings are falling too. Why should an oversold Naasdaq cause my shares in Peterhouse, MICE Holdings and Bowthorpe, to name a few, follow suit?"

Another investor responded:"So the market is idiotic, but wait for the stampede to end... It's a jungle out there and the herd is on the move." As if to echo those sentiments, investors flocked to a new Internet investment fund launched yesterday. The £400m Amerindo Internet Fund announced it would scale back requests for shares from big institutional investors in favour of individuals.