Tomkins, the British engineer, warned on third-quarter profts after a slowdown in its American markets, sending its shares tumbling more than 14 per cent and dragging sector rivals lower.

The company, which makes parts for car engines and products used in the construction industry, said the problems faced by American car giants Ford and General Motors had been more severe than it had expected and had hit demand.

Tomkins also said the residential property market in North America, which accounts for 12 per cent of its revenues, had slowed dramatically at a time when it would traditionally accelerate.

Booming US property prices prompted fears earlier this year of a speculative bubble.

Slower trading in July and August had been lower than internal management forecasts by some £11 million, Tomkins said.

It said it traditionally expected to make 50 per cent of its quarterly operating profits during September, "a key trading month", and would be in a better position to assess the full impact at the end of the full quarter.

But investors send Tomkins sharply lower. The shares were 40.25p, or 14.24 per cent lower at 242.5p, wiping £344.7 million off its stock market value.

Based on last night's close Tomkins was worth £2.4 billion.

Andrew Carter, an analyst at Bridgewell, said: "While neither issue should be news to market participants, this is the first case of a capital goods company warning on either [North American car production or the residential housing market] and we would expect Tomkins shares to be under pressure today."

Other London-listed companies with exposure to the North American car or housing markets were hit by the Tomkins warning. GKN, which sells into the same motor US markets, lost more than 3 per cent, down 9.25p at 291.5p.

Laird, which has exposure to house-building in North America, fell 20.75p, or 5.06 per cent, to 389.25p. And Invensys was pulled 5.64 per cent lower, down 11.25p at 188.25p.

For details on Tomkins shares click here

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