Fragile London shares continued to slip despite overnight respite from both Wall Street and Tokyo's Nikkei index.

The continued decline followed Tuesday's freefall when the FTSE 100 index lost £36.1bn in value - its third biggest ever points fall.

After a cautious rally of around 28 points in the opening minutes, the Footsie fell 29.1 to 5508.4 as dealers continued locking in last week's profits.

Trading was very thin despite firm European markets and a rally on the Nikkei and Hang Seng indices and a minor gain on Wall Street.

"Just because Wall Street closed steady we won't necessarily have a steady day today - that's the feeling," said one senior equity salesman.

Allied Zurich, the insurer, gained 18p to 833p, investment group Amvescap rallied 8p to 460p, Barclays jumped 22p to £13.50 and Royal Bank of Scotland put on 14p to 870p.

Among smaller stocks, a clutch of corporate announcements kept analysts busy.

There was news that Belgian group Etex is to rescue building supplies group Marley from a hostile bid by Mansfield.

Belgian group Etex is offering 125p a share for the company, lifting Marley up 16.5p to 122p - a 16% gain.