Jitters over the direction of British base rates overshadowed a firm start on the Dow Jones Industrial Average index to once again bring a poor close to London for the second successive session. While few expect an immediate rate rise the underlying strength of the economy is causing inflation and interest rate concerns.
Those looking for value continued to invest in the domestic cyclical stocks, and there was good buying of the food retailers in particular in the wake of a strong recommendation from Deutsche Bank. Having touched a peak of 6,282.9 in early trading, the FTSE 100 index closed at 6,235.4, down 15.2. Volume fell back below the 1 billion mark to end at 969 million.
Interest in the second line stocks continued yesterday, helping the FTSE 250 gain another 22 to 6,014 while the SmallCap index finished the day 9.5 up at 2,729.4.
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