BETTER than expected British producer price data and Wall Street's astonishing recovery last Friday, when it closed 29 points up after an initial 80 point fall, saw London's equity market regain its composure and make strong progress yesterday.
But a number of dealers around the City's trading rooms warned of the potential for more market upsets on both sides of the Atlantic throughout the week.
It was a startlingly strong US non farm payroll report published on Friday, showing twice the amount of new jobs than had been expected, that triggered the big initial slide on Wall Street and across European stock markets.
The leap in the non farm payroll ignited fears that the Federal Reserve will increase US interest rates, to stifle inflation, at the next Federal Open Market Committee meeting on July 2nd.
The real disappointment in the market yesterday came with the dismal level of activity. Turnover at the 6 p.m. calculation came out at a worryingly low 518.9 million shares, the poorest daily turnover level for many weeks.
That number is expected to reflect a level of customer activity closer to £1 billion than the near £2 billion numbers of recent sessions.
There was disappointment at Wall Street's performance yesterday, when the Dow Jones Industrial Average gave up around 25 points shortly after trading began.
Later this week the US market has to contend with producer price numbers due today inflation figures tomorrow and retail sales data on Thursday.
British data due this week includes unemployment figures and inflation news for May, both of which upset market sentiment.
Tomorrow sees Mr Kenneth Clarke, the Chancellor of the Exchequer, and Mr Eddie George governor of the Bank of England addressing the assembly at the Mansion House.
The day's big story was the news that Standard Life, the Scottish mutual, is to sell the majority of its 32.5 per cent stake in Bank of Scotland via a secondary offering, in the form of a book building exercise.
There was talk in the market yesterday, however, that the stock could be sold much sooner, via a placing around the 225p a share mark. While a placing would remove one of the big stock overhangs that have capped the stock market recently, there remains the threat of other big rights issues.
