Market Report - London

Confidence in London's equity market was just about hitting rock bottom as the market closed yesterday, with share prices suffering another battering, this time in the wake of economic news from the US.

Already pressured on the downside by a series of events - the rise in British interest rates, difficulty in shifting large lines of stock via the market's new trading system, and the worries about far eastern markets - British shares were hit by a steep decline on Wall Street after the employment report.

The report saw the number of new jobs created in the US at 284,000, compared with a revised 269,000 new jobs in September, driving the unemployment level in the US down to a 23-year low of 4.7 per cent.

Wall Street's initial reaction to those numbers was to hit the stock market very hard on the downside. The Dow Jones Industrial Average fell over 100 points in short order, and was still that amount lower well after London finished for the day.

London, already savaged by the 25 basis points increase in British interest rates, and the possibility of a further increase in the near term, as well as the latest plunge in Far Eastern stock markets, took fright at the US numbers.

The index was always under pressure during the morning session, affected by a general lack of support amid the global interest rate fears and the steep declines in the Far East stock markets, plunging 164.2 points at its worst following the US data.