London stocks closed at their lowest level for more than a week as sharp falls on Wall Street prompted profit-takers to lock in recent gains.

The FTSE 100 fell 100.3 points, or 1.7% lower at 5,743.9, a level not seen since November 20.

As Wall Street continued a dramatic slide, draggd down by the fall of Internet stocks, the selling pressure on London shares intensified.

The Dow extended early losses on Internet stocks to be off 133 points by the London close.

"The sharp losses in the Internet stocks on Wall Street have probably reminded people here of what happens when valuations get out of touch with reality," said Ian Williams, UK strategist at WestLB Panmure.

London markets were also kept busy by corporate merger news.

Germany's Deutsche Bank confirmed its takeover of the US bankers trust BT.N, while the pharmaceuticals giant Hoechst looked set to unveil a deal with the French Rhône-Poulenc.

The Franco-German merger would create one of the world's largest pharmaceuticals companies in terms of sales, surpassing even the UK's Glaxo Wellcome.

Meanwhile, Total called a special board meeting amid talk of a possible bid for Petrofina, while energy group Exxon could announce the takeover of Mobil on Tuesday.

The market reacted with disappointment as Shell - seen as one of the potential candidates for further consolidation in the oil industry - said it had abandoned talks with Texaco of the US on forming a cost-cutting alliance in their European refining and marketing businesses.