At the same time, Prudential PLC is assessing whether to go ahead with the sale of shares in its online-banking arm, Egg. This follows the decision over the weekend by video-on-demand service Yes Television to cancel its IPO.

Instead of sizing up new issues poised to hit the markets, some of the biggest money managers are busy reducing their holdings in the once-hot TMT sectors - technology, media and telecommunications - and trying to salvage their funds' performance. "The IPO market is essentially dead until later in the summer," said Michael Bourne, a partner at fund-management adviser Reabourne Ltd.

Despite the turmoil in the new-issues market, United Kingdom and other European markets did manage to edge higher Tuesday, drawing strength from Monday's late rally on the Nasdaq Stock Market. But Tuesday's weak opening in U.S. markets cut into early gains. Asian and Latin American stocks were generally lower. Overall, the Dow Jones World Stock Index fell 1.89, or 0.82per cent, to 227.55. Excluding the U.S., the index rose 0.78, or 0.47per cent, to 167.87.

The postponement of IPOs in the United Kingdom casts doubt on whether investment bankers will be able to carry off existing IPOs in the pipeline, like those from Opal Telecom PLC and filmgroup. Officials at Opal and filmgroup say the companies are still proceeding with the offerings."We are seeing an acceleration in the number of companies postponing their floats because the banks have taken the view that they can bring these companies back to market at a later date," said Simon King, a U.K. fund manager at investment house Gartmore.

"The stigma associated with a failed IPO is no longer relevant in this market correction. At some point, there will soon be a lull of new issues, and then we will start to see the companies edging back in September," he said.

TeleCity, an Internet infrastructure and services provider to telecommunications companies, postponed its IPO from Tuesday until market conditions improve. This is a sizable flotation as TeleCity wanted to raise as much as 196 million pounds ($289.6 million or 319.4 euros) and was gunning for a market value of 783 million pounds.

L. Gardner Group also decided to pull the IPO of Direct Message, an advertising company. Direct Message wanted to raise about 30 million pounds and have a market value of as much as 50 million pounds.

-- The Wall Street Journal