HOPES that share prices on the London Stock Exchange would end the week on a high, were dashed last night as a further crisis of confidence shook the city and sent prices tumbling.

The temporary reprieve from the recent downward spiral in prices collapsed dramatically yesterday.

Three days of gains were overturned in one bout of selling, which wiped £48bn off the value of leading shares.

The FTSE 100 fell throughout the session to close 199.0 points down at 4098.3, above Monday's five-year low of 3994.5 but still enough to dent the confidence that had crept back into the markets during the course of the week.

Few in the City were surprised by the downturn.

Alex Scott, equities analyst at Seven Investment Management, said: ''It was always on the cards.

"Yes, there was a chance of a rally, but it was optimistic to hope it would all be one-way traffic.''

Once more the blow came from across the Atlantic, sparked by a dismal performance on Wall Street.

The Dow Jones Industrial Average was off 249 points by London's close and the tech-laden Nasdaq also traded lower.

Mr Scott said a string of disappointing statements had rocked the fragile mood in the US.

These included reports of an inquiry into drug company Johnson and Johnson and a bleak outlook from Microsoft and Sun Microsystems.

''We haven't seen companies coming out and beating expectations as people had hoped and that's been a disappointment,'' he added.

The market's hopes for respite on a number of corporate reports due next week, including drugs companies GlaxoSmithKline, the Abbey National bank and telecoms group BT.

Mr Scott said: ''There are some big indicators for important sectors reporting next week and they will hopefully give us an idea about how companies are coping out there.'

But he said this did not automatically mean better times for the stock market, adding: ''Volatility is certainly the name of the game at the moment as investors are trying to react quickly to news as it comes out."