AN EARLY attempt by the UK stock market to build on Tuesday's substantial gains quickly met resistance yesterday with the market falling away before a moderate rally.
At the end of a day, which saw the FTSE 100 lose and then quickly regain the 3,700 level, the index settled at 3704.2.
Second line stocks were much quieter, with the FTSE Mid 250 index never much more than 2 points lower, and eventually closing 1.9 off at 4035.6.
Dealers were by no means depressed by the day's market events. Indeed, some remained firmly on the bull tack, persisting with the view that more corporate activity will develop in coming months.
Many of the big broking houses remain cautious of the UK market. Lehman Brothers said it "expects a retracement of the Footsie on a 12 month view to around 3350". Goldman Sachs told its clients to "use any strength in equities to switch into bonds", pointing to "worrying signs that corporate profits will grow more slowly than the market believes as well as the potential for a change of government.
The strategy team at Credit Lyonnais Laing expects the UK market to rise only modestly in 1996, forecasting a year end FTSE 100 of 3750.
The market's rather optimistic expectations that the monthly meeting between the Chancellor of the Exchequer, Mr Kenneth Clarke, and Mr Eddie George, governor of the Bank of England, could have brought another UK interest rate cut, came to nothing.
