£20 billion was wiped off the FTSE 100 earlier today before markets recovered from their negative response to the foiling of a terror plot by UK police this morning.
Severe disruptions to travel in Britain hit airlines, travel firms and mobile phone companies, but a major sell-off was averted as markets recovered in late afternoon trading.
The aviation sector was especially hard hit by the slowly unravelling news of a plan to destroy up to ten aircraft while travelling, fully loaded, over the Atlantic.
Shares in British Airways dropped by over five per cent today and were the worst struck by the police raids disrupting the terror plot.
But other airlines also suffered, with Ryanair falling by 1.46 per cent and easyJet down by 2.07 per cent as trading ended. The two were at one stage down 3.98 per cent and 2.25 per cent respectively.
European airlines were also damaged by concerns raised by the failed terrorist plot. Air France's shares were down by 3.04 per cent on the Paris Stock Exchange while on the Frankfurt Stock Exchange Deutsche Lufthansa was down by 3.28 per cent.
Overall the FTSE finished down 37 points while the FTSE 250 was down by 67.6 points. But the Dow index was up by 37.5 while Nasdaq managed to recover to 9.3.
But the British Airports Authority (BAA), the airports operator bought by Spanish utilities giant Ferrovial earlier this year, escaped relatively unscathed. Its shares dropped by just 0.16 per cent.
BA remains the main casualty of the disruption, however. It has attempted to mitigate the damage by releasing a statement blaming the "severe airport congestion" for the "major disruption " being encountered.
It announced cancellations of all shorthaul inbound and outbound flights to and from London Heathrow airport while additional domestic and shorthaul flights from London Gatwick also faced cancellation.
"Any customers who do not need to travel today are advised to stay at home," BA said.
"Customers who choose not to travel from any UK airports on BA today or tomorrow will be able to refund or rebook their flight tickets."
Falls in market value throughout the aviation world reflect fears that a similar sharp decrease in share prices did not match the collapse in confidence which occurred following the September 11th 2001 terror attacks on New York City.
Observers have pointed out that had the terrorists' plot been carried out the impact would have been substantially greater.
Today's disruption is likely to have a significant knock-on impact on British companies, like chauffeur and hotel services, which rely on the travel of businessmen from airports.