A niggling sell-off in the technology, media and telecom (TMT) stocks, one of the mainstays of the London market in recent sessions, was the prime cause of yesterday's minor setback in equities.
Apart from the most fleeting of gains during the first minute or so of trading, the FTSE 100 never looked likely to move decisively into positive territory, sliding to its session low of 6,187.9 early in the day and again threatening that level around midday. It eventually settled 17.3 off at 6,214.7, its partial recovery during the late afternoon due mostly to a gradual improvement on Wall Street, where the Dow Jones Industrial Average pushed up around 70 points and the Nasdaq around 30 points.
The FTSE 250, meanwhile, fell 24.9 to 6,676.5 while the Techmark 100 dropped 39.57 at 2,735.09. The FTSE SmallCap provided a minor measure of relief for some investors, edging up 4.1 to 3,304.0. No fewer than 14 out of the worst 20 performers came from the TMT areas, which retreated in the face of some more bad news from the US overnight, concerns about the timing of the introduction of mobile Internet services and some worryingly weak results from Deutsche Telekom.
But while there was widespread unhappiness in the TMT sectors, the rest of the market and particularly the old economy sectors performed reasonably well.
The banks sector, which has outperformed the market for the past year or so, continued to underpin the FTSE 100, with investors still keen on the sector in the run-up to its results season and on the prospects of further consolidation.
Against the trend of the past year and more, it was the beleaguered general retail sector that provided further good support for the 100 index, with Marks & Spencer, the UK's flagship general retailer but now very much a fallen star, one of the best performers among the leaders. M&S's position among yesterday's winners came as the group issued its eagerly-awaited pre-Christmas trading update, which, while not greeted with cheers and the ringing of church bells, brought sighs of relief from many worried shareholders.
The retailer told the market that although its like-for-like sales had fallen 5.1 per cent during the 16 weeks to January 20th, it had managed to hold gross margins.
But pessimists insisted that once the market's number-crunchers got to work on the figures the picture could well change. Dealers said they were disappointed at the poor level of business shown by the market yesterday.
