It was a bad day at the end of a bad week for London stocks as another burst of anxiety about the potential impact on profits of the upsurge in crude oil prices brought further downside pressure on UK stocks.
Some dealers claimed the latest decline in the market, which saw the FTSE 100 lose ground for the fourth consecutive session, had been overdone, and that much of the damage in the index was down to weakness in the so-called "super stocks" such as Vodafone, BP and Shell. But there was a genuinely uncomfortable feeling right across the board in the leading stocks after the recent profit warnings from a handful of global stocks, including DuPont.
Dealers mentioned other nagging recent concerns about stocks such as Intel, which unsettled the Nasdaq Composite. US markets came under renewed downside pressure with the Dow Jones Industrial Average sliding 68 points shortly after London closed, and the Nasdaq sliding back below 4,000 before picking up after UK trading ceased.
The FTSE 100 index eventually fought off a determined attack on the 6,600 level, which saw the index plunge 128.1 to 6,561.1 at its worst before rallying to close a fraction above the critical 6,600 level and 88.5 off on balance at 6,600.7.
Some dealers were alarmed at the apparent lack of support for the index. Many expected buyers to move in to chase the market as it dropped to the 6,650 level. Of the other FTSE indices the pressure was much less, the FTSE SmallCap managing a minor gain and finally was 2.6 firmer at 3,618.2, having been up 6.2 at best. The FTSE 250 had to endure a rocky afternoon, however, as an earlier gain of 25.3 was gradually eroded and replaced by a closing fall of 11.5 at 6,988.5.
The reversal in the Nasdaq Composite had a damaging effect on the Techmark 100, which saw a drive up to 4,073.53 reversed and the index depressed to 3,974.43 before a close of 4,009.44, down 15.76.
It was a poor finish to what promised to be a good week for London's market. The upsurge in TMT stocks just over a week ago was being put forward as the start of an early end-year surge by the market. And the decision by the Bank of England's monetary policy committee to leave rates on hold was another positive for sentiment. But the growing unease about the potential inflationary impact of rising oil prices and some cautious remarks about the market by the UK strategy team at Deutsche Bank, have unsettled sentiment.
Adding to yesterday's weaker trend were further nasty looking falls in Granada Compass, whose shares followed up Thursday's late 8 per cent decline with a similar fall yesterday, amid a sequence of earnings downgrades. And Invensys, which shocked the market with a profits warning, fell a further 7 per cent.
Turnover in equities was 1.67 billion shares.
