There was more pain for an increasingly nervous London market yesterday as a strong US retail sales report for August was seen as increasing the chances of a rise in US interest rates next month.
At the close, the FTSE 100 index was left nursing another sizeable decline, down 53.8 at 6,116.0. The FTSE 250 index also fell, dropping below the 6,000 level for the first time since August 19th. It closed a net 57.6, or 1 per cent, off at 5,980.2. The FTSE SmallCap, also negative, fell 18.3 to 2,835.2 despite the latest flurry of takeover news which included two bids.
The mood at the close was in stark contrast to that shortly after trading commenced, when a flurry of takeover stories, actual and rumoured, were quickly followed by a highly encouraging inflation report. That showed the headline domestic inflation figure at 1.1 per cent in August, the lowest figure since July 1963, and the underlying rate at 2.1 per cent, the lowest since October 1994.
But confidence began to drain away even before the US retail sales news was announced, with the composite insurers buffeted by news of Hurricane Floyd, which is threatening to strike Florida. Turnover in equities reached 1.1 billion shares.
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