London shares were marked down sharply on its opening, dropping on a bout of profit-taking following yesterday's 100 point rally.

At 0930 GMT, the FTSE 100 was down 60 at 5,271 although second-line stocks on the FTSE 250 were flat around there opening levels at 1,969.

Wall Street's late reversal last night, a 2.2% drop by Tokyo's Nikkei overnight, weak continental markets and concerns about the viability of any worthwhile austerity package Brazil might unveil later today all played their part in London's early slide.

Meanwhile, disappointing first-half results from Sainsbury and Whitbread added to the general gloom.

Around £17.5bn was added to the value of top British firms yesterday as shares surged on renewed hopes that interest rates would fall again soon.