Equities uncertain ahead of Danish result

With the outcome of the Danish referendum on the euro on a knifeedge, it was always going to be difficult for London's stock market to make a decisive move yesterday.

Dealers said a No vote by the Danes would probably be taken as a general thumbs down for the currency, which would bring another burst of downside pressure on the euro and be bad for European markets, London included.

Taking the theory a stage further, there were suggestions that if the euro came under heavy fire the central banks that propped up the currency last week would most likely intervene again. An interest rate rise by the European Central Bank to support the euro was seen as unlikely.

Overall it looked as if the markets had settled for the most marginal of No votes in Denmark.

The FTSE 100 index moved in an 80-point arc, edging higher at the start, but then slipping away as the morning wore on and the Danish referendum worries began to gnaw at sentiment.

Up 21.3 at 6,290.6 a few minutes after the market opened, the FTSE 100 retreated to post a session low of 6,210.8, before stabilising and then rallying as Wall Street pushed ahead strongly.

The 100 index ended the day only 5.2 off at 6,264.1. Other FTSE indices also finished off their lowest levels. The FTSE 250 lost 26.9 to 6,672.7, after 6,658.5, while the FTSE SmallCap dipped 10.2 to 3,049.0, after 3,407.8. The Techmark 100 was 34.20 easier at 3,715.24.

Although the London market tended to run in both directions as the Danish exit polls were announced during the afternoon, it was the upsurge in the Dow Jones Industrial Average and, to a lesser extent, the Nasdaq that sparked much of the London market revival.

Not long after London closed the Dow was up almost 200 points and the Nasdaq 80 as US investors responded to the upward revision in US gross domestic product. The Dow had fallen away for five consecutive sessions, burdened by a series of profit warnings. A flat trend in oil prices after Saudi Arabia reiterated its desire to see crude oil price below $30 a barrel added to the better feel.

Market bulls welcomed the near completion of the third quarter which has seen the FTSE 100 race up from 6,601 to top 6,800, before retracing all the way back to just below 6,200. The optimists are now hoping for a strong end to the year. Turnover in equities reached 1.65 billion shares, topped by Vodafone where turnover of 225 million shares accounted for almost 14 per cent of the total.