Old favourites rescue FTSE from early decline


A good showing by some of the London stock market's old favourites helped offset a lacklustre performance by the TMTs and rescued the FTSE 100 from an early decline yesterday.

It was a late run by the pharmaceuticals, tobaccos, oil majors and banks and insurers, all propped up by corporate news and a strong start to the day by the Dow Jones Industrial Average, that enabled the FTSE 100 to recoup an early niggling decline and edge higher during the last hour or so of the London trading session.

The same was not true of the other indices, with the FTSE 250 scraping home with a minor gain on the day. The FTSE SmallCap was hit by a fresh dose of weakness in the tech-related areas of the market as was the Techmark 100.

While London's benchmark index, the FTSE 100, spent much of the session in the red, driven lower by a shift of sentiment in the TMTs, it was a positive performance by Wall Street, based mainly on the prospects of an end to the exasperating US presidential election that beefed up sentiment in global markets.

There was no hard news about the election during and shortly after London trading hours, but the overwhelming view among traders was that a Bush victory was only hours away.

But while the Dow was up 130 points as London closed, the techheavy Nasdaq Composite was moving in the other direction, posting a 50-points fall at the same time. The Nasdaq was once again weighed down by the latest dose of profit warnings from the TMT areas, which included Microchip Technology and Advanced Micro Devices.

Another warning announced yesterday, from Honeywell, the US aerospace and technology group, cut heavily into sentiment in BAe Systems, among others.

At the end of a rather tense session the FTSE 100 scrambled ahead and closed on the 6,400 level, eventually settling a net 20.1 higher at 6,390.4, having touched a session best of 6,386.6. In midmorning, the index fell 37.1. That rise extended its winning sequence to a third straight session during which the index has risen 159 points, or 2.6 per cent. It was not such a happy session for the Techmark 100 which dropped 49.36.