MARKET REPORT - LONDON

RENEWED worries about global bond markets continued to weigh heavily on shares in London, which turned in another disappointing…

RENEWED worries about global bond markets continued to weigh heavily on shares in London, which turned in another disappointing performance yesterday.

A poor showing by gilts, where the 10 year issue closed 11 ticks lower and the 20 year 12 ticks down on the day, did nothing to bolster confidence in equities.

The pressure on gilts stemmed, dealers said, from weakness in German bonds, which reflected increasing concerns about the Russian elections, due to commence this weekend, which could see the return of communist rule.

Treasury bonds on the other hand, were not overly troubled by the Russian election and performed relatively well yesterday afternoon, in the wake of the latest US economic news on industrial and manufacturing production.

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The statistics tied in with a series of US economic data, including retail sales and producer and consumer prices, which showed little sign of inflationary pressures.

Over the week, Footsie posted a 46.8 gain, with some observers adopting the view that interest rates may be cut further ahead of a general election. The Mid 250 index was only 18.8 higher on the week and was burdened by under performance by some of the utilities.

Overnight news of the estimated $1.8 billion of losses incurred by Sumitomo Corporation of Japan in the copper market caused unease across all markets.