FTSE rises but broader market still depressed

A choppy day for the UK equity market saw the FTSE 100 index recover some of Tuesday's losses but leave the broader market still depressed.

Tuesday's near-300 point fall in the Dow Jones Industrial Average ensured another difficult start. In the first hour of trading, the FTSE 100 had reached its lowest level of the day, down 108.8 at 5,354.3. But hopes of a better day on Wall Street prompted a rally in the UK market, carrying Footsie into positive territory by early afternoon.

Wall Street had a very volatile opening period with the Dow Jones Industrial Average falling 100 points before reversing direction to be more than 100 points higher just before the London close. That enabled Footsie to end the session close to its high for the day, up 72.6 at 5,535.7.

The blue chips were given a boost by telecoms, with BT and Vodafone two of the index's top four performers, and Prudential, on hopes that its bid for fellow insurance group American General would not proceed.

The Techmark 100 index slipped to another new low, down 6.58 at 1,764.44.

Many in the market are hoping for an interest rate cut today from the Bank of England's monetary policy committee. But yesterday's economic data did not offer any conclusive guidance as to the committe's likely decision.

The purchasing managers' index of the services sector fell slightly but, at 56.3, was well above the 50 level, indicating that the sector is still growing. Meanwhile, the Confederation of British Industry's distributive trades survey indicated that activity on the high street was still fairly buoyant.

Turnover was 2.18 billion shares by the 6 p.m. count. The number of individual trades topped 148,000, with Richard Hunter of NatWest Stockbrokers saying there were signs of end-of-tax-year selling by private investors.

Lombard Street Research says that cash payments to shareholders from companies fell by 16.8 per cent in 2000. The figure includes dividends, special dividends and share buy-backs.