INDIVIDUAL stock price movements rather than broad market trends tended to reflect the mood of an equities market lacking a decisive lead at the start of a very important week for global equities.
Today brings the start of the regular Federal Open Market Committee meeting, scheduled to last for two days. Thursday sees the Bundesbank council meet in Frankfurt.
Both meetings will decide the future of interest rates in the US and Germany and set the course for global interest rates.
London stocks traded in a narrow range, kicking off the session in good form but quickly running out of steam as market makers and investors stood back to await the big interest rate decisions to be taken later in the week.
"No one wanted to get too involved ahead of what could be two pivotal decisions in the world market," said one leading trader. Other dealers agreed and also pointed to the latest bout of nervousness surrounding international bond markets, which saw US Treasury bonds, German bonds and gilts lose further ground.
The general market lethargy extended to the recently resilient second line stocks which meekly followed the trend in the leaders, before edging ahead late in the session. The FTSE Mid 250 index settled a net 3.5 higher at 4,089.1, and was given a substantial boost by two 5 per cent plus gains in Lloyds Chemists and Stagecoach.
Lloyds' latest upsurge came in the wake of intense speculation that Gehe, the acquisitive German pharmaceuticals wholesaler, may be about to launch a counter to the agreed £538 million sterling bid for Lloyds from Unichem, the British pharmaceuticals distribution company.
Stagecoach, the rapidly expanding transport group, raced higher on news that it is bidding for MS, the Stockport based bus group.
As far as the leading stocks were concerned, banks and other various bid targets attracted most business.
The bank sector, one of the best performing areas of the equity market last year, was the centre of attention. Now split into two specific areas, those specialising in the savings/mortgage businesses and those with global investment banking aspirations it was the perceived mortgage price war that damaged Lloyds TSB and Abbey National. Barclays and NatWest, on the other hand, were always in good shape with some observers noting evidence of large scale switching between the two groups of banks.
Top performances in the FTSE 100 came from Ladbroke, which was once again put forward by the weekend press as a potential break up target.
Turnover at 6 p.m. came out at 664.5 million shares, well down on recent sessions, but by no means disappointing compared with recent Monday sessions. Non FTSE 100 stocks accounted for 55 per cent of total business. Customer business on Friday was valued at £2.1 billion.
