With trading almost non-existent as investors preferred to bide their time for the launch of the euro, London shares ended the year's mid-day session deep in the red.

The thin trading led to dangerous volatility and within an hour of opening the FTSE-100 Index had begun a downward spiral. Just twenty minutes from the final bell, it sank 132.5 points to touch a low of 5809. The index finally closed down 58.9 points at 5882.6.

The market seemed unaffected by Tuesday's rally on Wall Street which saw the Dow Jones close up 98.23 points.

Among corporate winners, construction group Alfred McAlpine gained 7.5p to 146p after announcing £104m worth of building contracts, including part of the Channel Tunnel Rail Link.

Business services group Hays announced it was to buy computer services company Axis Resources for £35.5m. Hays jumped 21.5p to 5275.p on the news.

The Television Corporation which announced a deal to produce Test match cricket for Channel 4 on Tuesday, continued its rise - up 7p to 242p.

Dealers also began speculating on the Christmas shopping season. Analysts believe the lower end of the retail market may well have fared better than upmarket stores. The main beneficiary was TJ Hughes which rose 7.5p to 171p. But other retailers took a tumble with Argos-owner Great Universal Stores down 16.5p to 633.5p and Boots down 15.5p to £10.23.5.