Fresh evidence that US policymakers will resist the urge to provide more emergency support and ongoing fears over the eurozone caused a 2% drop on London's leading shares index yesterday.
The FTSE-100 Index closed 134.6 points lower at 5703.8 after America's central bank appeared to back away from further quantitative easing.
This surprised investors who were further shaken by a survey showing a slowdown in the US service sector in March, as well as a troubling debt auction in Spain, which once again raised the spectre of the eurozone debt crisis.
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