Another flurry of bad news from the corporate sector sent the FTSE 100 index into sharp retreat yesterday, leaving the blue-chip benchmark fractionally above its low for the year.
Footsie closed down 85.1 at 5,320.2 but, at its worst for the day, it was off 92.3 at 5,313.0, just below the 2001 closing low of 5,314.75, recorded on March 22nd.
The market has been able to hold above the March lows in recent weeks but confidence has been repeatedly shaken by corporate news. It was the same story yesterday.
A profit warning from Invensys can hardly be described as a terrible shock, given the number of times the electronics and engineering group has disappointed the market before.
The company was formed from the merger of BTR, an habitual profit warner and Siebe; alas, rather than Siebe management transforming BTR, the old BTR seems to have dragged Siebe down. But some in the market had clearly been hoping that the prodigal son might have reformed, given the scale of the reaction to yesterday's warning. The shares fell 15 per cent on the day.
Bad news had been expected at Reuters, the information group, but the gloomy news on the company's outlook made the shares one of Footise's worst performers.
There were also profit warnings at the smallcap end of the market, with Wyndeham Press, the printing company and Orbis, the support services group, providing the bad news.
The news from overseas was also bad with a profit warning from European engineering group ABB and downbeat figures or statements from Amazon.com, AT&T and Lucent.
The Dow Jones Industrial Average was down more than 100 points just before the London close that followed Monday's 150 point loss.
All this ensured that UK stocks were weak right across the board. The FTSE 250 closed just above the 6,000 level, dropping 66.4 to 6,003.3 and the SmallCap index fell 19.1 to 2,750.9. The Techmark 100 index closed just above its all-time low, recorded last week, finishing 17.48 down at 1,503.39.
The UK market's recent weakness means that it is now in an "oversold" condition, according to SG Securities, which monitors the ratio of call (buy) and put (sell) options.
