Currency intervention bolsters flagging market

After 12 losing sessions out of the past 13, one of the longest downside sequences that even the oldest of old market hands could recall, it was about time the FTSE 100, the London market's benchmark, staged a rally.

That it did, but only just, and only after a massive and concerted bout of intervention in foreign exchanges by central banks, including the US Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England.

Coming in the wake of a global market tumble, which owed everything to the profit warning issued by Intel, the world's biggest computer chip manufacturer, the move was well-timed to bolster stock markets, London included.

News of the euro intervention electrified markets, which took another fearful hammering at the opening as market-makers chopped their dealing prices in an attempt to head off any wholesale selling by the institutions.

By the end of a frantic trading session, the FTSE 100 had just scrambled into positive territory to finish 6.7 higher at 6,205.9. At its lowest, the index plummeted 124.1 to 6,075.1, with many market bears forecasting a decline to below 6,000.

But it was a close-run thing, as the index shifted from blue to red and back during the final 10 minutes of trading, incorporating the auction which sees brokers enter unfulfilled buys and sells.

The closing gain for the 100 index was in sharp contrast to the further weakness that swept across the rest of the market.

Although closing well off their lowest levels, the rest of the main FTSE indices were still left with hefty losses. The 250 index fell 58.2 to 6,645.1, having plunged below the 6,600 level at its worst. The SmallCap, meanwhile, lost 45.7 to 3,425.7 after hitting a low point of 3,421.4. The Techmark 100 finished 51.21 off at 3,646.05; at its worst of the session, the index touched 3,532.80.

European markets got precious little help from Wall Street, however, where the Dow Jones, which closed before the Intel profit warning was announced on Thursday, dropped 143 points not long after the opening, before staging a minor rally.

Over the week, the 100 index fell 211.4 points, or 3.3 per cent, while the 250 dropped 310.1, or 4.5 per cent.