London shares ended a dismal day not far above seven-month lows after doom and gloom shrouded other major markets around the world earlier in the week.

Traders came back on Wednesday morning from a four-day weekend to celebrate the 50th anniversary of the start of Queen Elizabeth II's reign.

But while the UK was on holiday, pessimism from key tech stocks, combined with yet more evidence of US corporate wrongdoing, had triggered a wholesale retreat in New York, Europe and Japan.

Stormy markets Friday-Tuesday falls

Dow Jones: down 237.41 points or 2.39% Nasdaq Composite: down 37.61 points or 2.33% Paris Cac-40: down 208.76 points or 4.88% Frankfurt Dax: down 192.51 points or 4.0%

The first-light slide came as little surprise, dealers said, taking the blue-chip FTSE 100 index to 4971.4 - a fall of 113.7 points or 2.24% to the worst level since October 2001 and the first dip below 5,000 since November.

By the afternoon, the mood shifted somewhat as New York opened almost 100 points higher, buoyed by traders eager to take advantage of the earlier across-the-board falls.

But as the US gains began to ebb, London traders again backed off.

The FTSE 100 finished the session down 96.0 points or 1.89% at 4,989.1.

The technology-tracking techMARK index, meanwhile, ended 26.68 points or 2.66% lower at 975.86, having earlier sunk below the 1,000 barrier to a new all-time nadir of 974.68.

Down, down, down

London's poor showing follows a fall of more than 200 points on the US's main blue-chip index, the Dow Jones industrial average, on Monday and Tuesday.

That decline was triggered in part by yet more caution about the prospects for recovery in the tech sector, while comments from Fed chief Alan Greenspan on Monday gave a less than bullish outlook for the national economy.

The shock resignation of the head of Tyco, a multi-billion dollar conglomerate, after being charged with tax evasion, only added to the pressure as Tyco slid more than a quarter.

And the treasurer of El Paso Natural Gas apparently committed suicide, adding to the market gloom.

With more bad news likely to come from other US techs this evening, the bargain-hunting could be limited, traders said.

Riding for a fall

In any case, the dour mood spread to other markets on Monday and Tuesday, and London is only now catching up.

Tech stocks were in the doldrums, with software house Sage losing almost 6% and chipmaker ARM Holdings off more than 4%.

Their smaller brethren, such as handheld computer pioneer Psion, were hit even harder, the latter dropping almost 7%.

Telecoms firms including MMO2 - down 5.9% - and BT Group was also losing ground, following warnings from Swedish mobile maker Ericsson that the market is unlikely to improve much this year from the 2001 trough.

BP and Shell each lost around 3% on news that oil stocks around the world are much higher than expected, further supporting the view that a global recovery is not quite on course yet.

Reuters, the news agency and financial information provider, dropped 3.9% after its US subsidiary Tibco warned last night of sales well below expectations.

On the up

London was not without its winners, although only 13 of the 100 stocks in the FTSE 100 list made any gains.

South African Breweries, for example, added 2.1% after investment bank Goldman Sachs told clients the company's purchase of US rival Miller would boost its profits for the next two years.

And defensive stocks - utilities, tobacco companies, landowners and mining firms, for instance - found buyers as investors sought safe havens.