Some of the heat generated by takeover fever on both sides of the Atlantic was removed from London's equity market yesterday despite the decision of the Bank of England's monetary policy committee (mpc) to sanction a 25 basis points reduction in British interest rates.
The rate cut, the fourth in as many months, came as a mild surprise to the stock market, where most observers had been expecting the mpc to wait until next month before moving again.
The committee said the cut was made because domestic data and survey evidence continued to show a slowdown in the economy.
The about-turn in the market place came as profit-takers moved in to take advantage of the gains of the previous two sessions, which took the FTSE 100 up 269.4 or 4.6 per cent.
At the end of the session, the FTSE 100 index was left with a 47.6 decline, although it just managed to close above the 6,100 level.
At its worst, minutes after Wall Street began trading, Footsie posted a three-figure decline and briefly looked like threatening 6,000.
Equities recorded a turnover of 1.25 million shares and featured heavy activity in most leading stocks.
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