London shares in freefall

London shares went into freefall today after more bad news from overseas sparked a sell-off in tech stocks.

By the close of trading the FTSE-100 Index was down nearly 2%, falling 106.2 points to 5555.7.

Wall Street’s Dow Jones Industrial Average - which had suffered a sharp fall Monday night - was battered by a warning from broker giant Merrill Lynch, which said weak market conditions would result in lower second-quarter earnings.

Sentiment was also hit by nerves ahead of the Federal Reserve’s interest rate meeting, which began today. The Fed’s decision will be announced tomorrow.

A warning of a slowdown in business from French computer consultancy group Cap Gemini also hurt shares in London.