Tech shares were hit hard in the UK Tuesday after a record points decline by the US' tech-heavy Nasdaq market Monday night. By mid-afternoon the FTSE's techMARK 100 index had dropped by more than 300 points to around 3,773. Microsoft was the main influence on Wall Street, falling heavily as it emerged the company had failed to settle its anti-trust case with the US government. A federal judge then ruled after official trading hours that the software giant had seriously violated US anti-trust laws. The ruling exposes Microsoft to harsh penalties which could even result in its break-up. Microsoft shares fell $15-3/8 to $90-7/8, knocking nearly $80bn (£48.8bn) off the company's market capitalisation and sending the Nasdaq into a tailspin. The US tech benchmark ended down 349.15 points -- its biggest ever points decline and fifth largest in percentage terms. Microsoft shares were marked up on the Instinet electronic brokerage system on Tuesday morning at $92-$93 -- in line with their after-hours level in New York -- although London dealers noted no trade by 0559 GMT. But US Treasuries and the Dow Jones Industrial Average both benefited from the flight from the Nasdaq. The Dow eventually closed up 300 points or 2.75 percent, even though Microsoft is one of its 30 components. The Dow was up only 141 points at the London close. "I think the FTSE will pay a bit more attention to the Dow, but the tech stocks are going to suffer," one dealer said. Bellwether UK tech stocks were suffering across the board Tuesday. In mid-afternoon trading chip maker ARM Holdings (quote: ARM) was down 310 to 3,182p. Handheld computer maker Psion (quote: PON), another key tech player on the FTSE, sank 320 to 3,660p. Shares of Amstrad (quote: AMT) continued to fall in the profit-taking aftermath of the release of the E-mailer phone, which had boosted expectations sky-high; Amstrad has lost 60 percent of its value in the last five trading days. E-commerce players sank as well. Auction site QXL.com (quote: QXL) was down 38 to 912p, while travel specialist lastminute.com (quote: LMC), which many see as the epitome of the Internet bubble economy, was down 27 to about 195p amid reports that refund cheques sent to investors had bounced. Other tech stocks under the spotlight included Sema Group (quote: SEM), Sage Group (quote: SGE), Logica (quote: LOG) and Misys (quote: MSY). News and information group Reuters (quote: RTR) could also come under pressure after its Tibco Internet software subsidiary fell 17 percent. There was precious little to drive the wider market from the smattering of small companies delivering results. Internet video company GEO Interactive said it had cut its losses to $7.5m in 1999 from $17.5m the previous year, while household products group Peter Black said pre-tax profits for the year to 31 January rose 14.2 percent to £24.8m. Dealers also noted a dearth of big economic numbers until UK industrial production data on Wednesday and said the most important economic event for UK investors was still the Bank of England's interest rate meeting which ends on Thursday. Reuters contributed to this report Tony Westbrook has been watching technology company stock prices as they race to the floor over the last few days. But he's spotted the reason why they will have to bounce back -- one day. Go to anchorDesk UK for the news comment. What do you think? Tell the Mailroom. And read what others have said. See techTrader for more technology investment news, plus quotes and research. Take me back to the Microsoft verdict roundup