London stubbornly refused to participate fully in what was seen as a general global market surge yesterday. Although the leaders, represented by the FTSE 100, closed higher for the fifth consecutive session, there was a marked reluctance by institutional and private investors to chase UK stocks higher.
"We had plenty of opportunities and excuses to move ahead, but the big institutions just didn't want to play; there is much to worry the market in the next couple of weeks and fund managers want to keep their powder dry," said one marketmaker.
He noted Wall Street's strong opening, which saw the Dow Jones Industrial Average blast back through 9,000, posting a three-figure gain in the process.
Others said they expected London to catch up on any good performance by Wall Street and other markets, pointing out that the London market tends to trade sluggishly on Mondays, "especially with the World Cup and Wimbledon as counter-attractions", as one put it.
At the close, the FTSE 100 just managed to scramble back into positive ground, helped along by a late burst of buying interest, some of it apparently from the US.
The index closed the day 7.1 ahead at 5,884.5, after swinging in an arc of nearly 55 points during a day that began brightly but subsequently failed to follow through. Footsie recaptured the 5,900 level during its initial rally, hitting a day's best of 5,923.9.
It was a similar story across the rest of the market. The FTSE 250 index settled 1.0 off at 5,521.3, having hit a session high of 5,527.6, up 5.3, in mid-morning. That was its 13th loss in the last 14 sessions.
Although never seen as heavily pressured, small stocks continued to struggle. The FTSE SmallCap index closing a net 1.1 off at 2,617.7.
Dealers insisted that London's reluctance to move ahead was a continuing reflection of the worries about the impact of the Asian crisis and sterling strength on earnings of the big UK manufacturers, as well as concerns about the possibility of another increase in UK interest rates.
And markets have to confront a series of important global economic news items this week, including the meeting later today of the US Federal Reserve's open market committee, which determines US interest rate policy.
