Major share indexes at 2000 GMT

FTSE 100: -111.7 at 5204.3 Dax: -172.71 at 4875.37 Cax 40: -90.81 at 4,480.75 Dow:-192.43 at 9840.84 Nasdaq: -53.37 at 1705.64

While German and French shares hit two year lows.

The technology-heavy US Nasdaq index sank 53.37 points, or 3.03%, to 1,705.64, its lowest close since 4 April.

For the year to date, the Dow is down 8.8% and the Nasdaq is off 31%.

Even news that the US Government has decided against asking the courts to break up software giant Microsoft in punishment for its anti-trust violations failed to lift the markets.

And there are concerns that Japan's Nikkei index could fall below the psychologically important 10,000 point barrier when trading begins on Friday.

The global share rout is being driven by doubts about a revival in company profits and gloomy corporate news from tech giants such as Motorola, in the US, and Britain's Marconi.

Tech sector suffers again

In London, the FTSE 100 index of leading UK shares closed down 111 points at 5204.

The index has not closed below 5,220 since October 1998.

Technology shares are dominating the losers' board, with Marconi shares slumping a further quarter to fresh life-time lows, and British Telecom hitting four-year lows.

Biggest UK fallers

1: Marconi, -23% 2: Energis, -16.0% 3: Spirent, -12% 4: Telewest, -12%

Marconi shares, which closed at 29p, have now lost 97% of their value since last September.

The company was shunned by investors after a credit rating agency cut the firm's rating to 'junk' bond status.

Two other tech firms Telewest and Spirent were among the biggest fallers, and are now in danger of dropping out of the FTSE 100 when the index is reshuffled next week.

BT's share price of 370.5p was last seen in September 1997.

On the Continent, shares in French telecoms equipment maker Alcatel plunged 9.1%, and German software firm SAP was down 7.0%.

And in the US, mobile phone maker Motorola warned that third-quarter sales would be flat, and announced it was cutting 2,000 more jobs.

There were also worries that the tech giant Intel was about to deliver more bad news.

"There seems to be another complete blow-out on the whole TMT sector," said Steve Russell, UK equity strategist at HSBC.

Interest rates kept on hold

In London traders got a fresh reminder of the problems facing the UK economy with the release of new manufacturing output figures.

A despairing Frankfurt trader

They showed that output fell a worse than expected 0.9% in July.

The FTSE had already sunk about 100 points by the time the Bank of England said it was leaving interest rates unchanged.

Most analysts had predicted that the Bank would take no action, and the decision had no impact on the market.

FTSE woes

The FTSE 100 index of leading UK shares is now back at levels it has not seen for nearly three years.

Between late 1998 and the end of 1999 the FTSE rose steadily with the boom in technology stocks driving prices higher.

But after reaching an all time high of 6930.2 in December 1999, the index has steadily fallen back.

In February this year the FTSE fell below the 6000 level and now the 5000 level is coming into view - something most investors would have deemed unthinkable during the height of the bull run.