Wedding presents are often a mixed blessing and the Chancellor of the Exchequer will probably find he is no different from anyone else when the dust settles. Yesterday, the Bank of England's monetary policy committee presented him with a decision suitably wrapped to leave interest rates on hold.
On the surface, the gift was an endorsement of the government's latest spending plans and a tacit acknowledgment considering that the committee had an early peek at the latest inflation data that the economic situation is under control.
However, the equity market remained unimpressed by the generosity and a three-day bull run was more than reversed as the Footsie dropped 73.9to 6,317.1, its lowest level for more than a month.
"It was one of those presents that looks nice to start with and ends up in the cupboard only to rebound on you in some way," said Mr Richard Jeffrey of Charterhouse Securities.
"The point about the committee's decision on interest rates is that it does not resolve the market's dilemma over monetary policy. The risk is always that if action is not pre-emptive it has to be more aggressive."
On the other hand, the market was always acting as if it was sucking a lemon. It started off tartly in response to weakness on the Nasdaq, which was lower on rumours of a profits warning from Cisco Systems, the tech company. The mood became increasingly sour as the S&P futures contract moved sharply lower in early trading after Kulicke & Soffa, the chip assembly maker, dived after announcing shipment delays.
Footsie refused to be appeased by strong figures from Barclays and Shell Transport two of the UK's leading companies. In fact, the banks were responsible for 14 points off the Footsie as the market worried about the imminent government response to the recent regulatory review. Meanwhile, the Nasdaq-related slide in telecoms sliced off another 35 points.
The market also ignored the latest decision by the European Central Bank to leave rates unchanged and preferred instead to throw its worries forward to the US employment report today, which will be taken as a big pointer to the US interest rate decision in just under three weeks.
"The Techmark 100 was worst hit with a fall of 134.5 to 3,432.84 but the general malaise was felt throughout the market.
The FTSE 250 index fell 67.7 to 6,679.5 and the SmallCap 11.3 to 3,374.7. Turnover by 6 p.m. was 1.5 billion shares.
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