The FTSE 100 ended Wednesday's session deep in the red, closing at 5870.2 - down 100.5 points, but above the low of 5836.9 mid-afternoon.

The slump began immediately after markets had opened, following the trend set the night before on Wall Street and then on the Asian and European markets.

In the afternoon, share prices were further depressed by a bearish start to trade on Wall Street.

In all, shares on London's leading index lost some £18bn.

However, the FTSE 100's losses of 1.7% were low compared to the performance of several other European markets: Paris fell 2.4%, Frankfurt 2.7%.

Many traders seem to be optimistic that the slump will not continue: "Its a good time to do a bit of bargain hunting," said Paribas strategist Corey Miller, who pointed out that although bearish signals from Asia were depressing the market in general, only a small handful of companies had exposures to the region that warranted the worry.

But if, as others suggest, the markets are beginning to see their long-awaited correction, now is probably the worst time to jump into the market.

Bucking London's downward trend was Halifax, up 5.6% on bid specualtion - there was talk of a merger with Royal Bank of Scotland - and news it is to enter the Morgan Stanley Capital International index of the world's 1,575 leading companies at the close of trade on Friday.

But mostly, the market was awash with red. Companies with heavy exposure to Asia displayed big sell signs - particularly HSBC and Standard Chartered which lost 6.6% and 5% respectively.

Elsewhere profit takers took advantage of recent strong runs to cash in their positions.

The general market mood meant that not-better-than expected corporate results, like quarterly figures from British Airways and finals from EMI, took a back seat.
 

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