The FTSE 100 Index slid 4.1 per cent today during another day of turmoil for world stock markets.

Trading screens in London were a sea of red as every single member of the Footsie succumbed to the losses.

London's benchmark index closed at its lowest level since last September, after continuing credit fears saw it fall 250.4 points to 5858.9 at the close.

The fall - the biggest one-day percentage drop since March 2003 - was heavier than last Friday's collapse and wiped nearly £6bn from London's leading companies.

The latest alarm for world markets came after US Bank Merrill Lynch warned that Countrywide, America's biggest home loan lender, was at risk as investors shunned mortgage securities.

Countrywide said it had borrowed $11.5bn US dollars (£5.8bn) from a consortium of banks, pushing the US Dow Jones Industrial Average nearly 200 points lower by the time the London markets closed.

Financial experts have urged Oxfordshire investors to hold their nerve amid the crisis.

Helen Merrington Rust, of Abingdon stockbroker Redmayne Bentley, said the key was not to panic by selling - and even look for opportunities to buy cheaper shares.

She said: "Some people are trying to cash in, but we are telling people not to sell. In fact we are identifying some opportunities coming up which look good value."

Ms Merrington Rust added that it was difficult to predict how bad the situation was.

The biggest losers on the FTSE 100 have been financial firms and banks exposed to bad debt, such as Northern Rock, which has seen its value plummet by 45 per cent.

But other areas such as tobacco and alcohol stocks have not fallen as dramatically, as observers believe they could benefit from the crisis.

Analysts have stressed the need to regard the stockmarket as a long-term investment.

Bruce Robinson, of Oxford start-up company Mindweavers, which is planning to float on the private Plus Markets next year, said: "This sort of thing is never positive, but it always goes back up after going down. We are not raising money at the moment, so we are not going to react."

Joanne Telford, of Oxford Capital Partners, which invests in small start-up companies, said the company would be launching a new fund in the autumn, as planned.

She said: "We are watching this very carefully, but the private investment market is very different from the stock market."

She said the turmoil might delay the growth of small Oxfordshire companies wanting to raise funds by floating on the Alternative Investment Market.

However, she said that, unlike the last downturn, investors did not seem to be avoiding the technology sector.

Ms Telford added: "A lot of people got badly burned last time and are still wary of science and technology, but people are now realising that the way to get great returns is to invest in potential high-flyers. We have not seen people turning away."