Something of an uneasy calm settled over London's stock market yesterday as the spectre of a fresh dose of emerging market panic cast a shadow over British stock prices.
Dealers and marketmakers continued to take the view that global markets had overreacted to the latest events in Brazil. But another downside performance by Brazil, off almost 3 per cent during London trading hours, quickly permeated through to Wall Street and saw London run back to finish the session with further losses.
The FTSE 100, burdened by a steep fall in Marks & Spencer shares, dropped more than 51 points minutes after the opening of trading and fell below 5,800 before rallying strongly on hopes of a recovery on Wall Street.
The FTSE 100 ended 29.9 off at 5,820.2 with marketmakers and dealers unwilling to speculate on the market's short-term future.
A market reverse, accelerated by the M & S profits' warning, was offset somewhat by Dixons' Internet success. Its good results drew a warm City response, as did the Philip Green-led bid for Sears. Turnover expanded to 1.34 billion shares.
