The FTSE 100 index suffered its third successive small loss yesterday, amid signs that the market was starting to lose direction.
With the budget and the US interest rate decision out of the way, there is no big market-moving event on the immediate horizon. And while there remains some scope for nervousness about technology valuations and British interest rates, it is hard to see shares falling far while private investors are rushing to beat the end of the tax year deadline for individual savings account contributions.
The British economic news of the day was mixed. The Confederation of British Industry's monthly survey found that order books had dropped in March and that export demand was well below normal. But manufacturers still expected a significant rise in output over the next four months.
Other markets also did not give much direction. On the downside, a rise in sterling was bad news for exporters. But the benchmark 10-year gilt was up nearly half a point, giving some valuation support to equities.
Wall Street looked as if it was going to have a poor opening, prompting the FTSE 100 index to drop to its worst level of the day, off 70.9 at 6,538.7. But the US market was pretty steady with both the Dow and the Nasdaq up 20-30 points by the time London closed.
That allowed the FTSE 100 to end with a modest loss of just 15 to 6,594.6. There were similar performances from both the FTSE 250, off 9.6 at 6,505.7 and the SmallCap, down 9.9 at 3,392.1.
The Techmark 100 index attempted to stage a rally after Wednesday's strong performance by the Nasdaq Composite in the US. But by the close it had subsided to a 8.15 loss at 4,511.91, 21.5 per cent down from its peak of 5,753.46 of March 6th. That is a bear market in terms of size of fall, although so far it is pretty short-lived.
There was no clear winner in the recent battle between old and new economy stocks yesterday. Traditional stalwarts such as Rio Tinto, GUS and Billiton were among Footsie's worst performers but technology favourites such as Freeserve, ARM, Psion and Baltimore also lost ground.
Meanwhile Celltech, the biotechnology company, continued its volatile run since joining the FTSE 100, by ending as the index's best performer. And shares in Lastminute.com, the Internet booking agent, finally put an end to their losing streak.
Some stock rotation would have been caused by institutional investors rejigging their portfolios before the end of the first quarter.
Volume was 1.79 billion shares by the 6 p.m. count, with activity in Vodafone still stimulated by Wednesday's placing.
