Shares struggle in meetings' shadow

SHARE prices in London could make no headway yesterday amid the uncertainty over the direction of British and US interest rates and following the two policymaking meetings in London and Washington.

Mr Kenneth Clarke, the Chancellor of the Exchequer, met Mr Eddie George, governor of the Bank of England, while the Federal Reserve's Open Market committee ended its two day meeting.

With no shifts in interest rates apparent during the trading session, but the threat of a US rate rise always in the background, share prices struggled throughout the day, eventually closing just off the day's lows.

Once again, turnover in equities was disappointing despite being boosted by a handful of special situations, notably the share buy back by RJB Mining, and some technical activity in National Power.

At the close, the FTSE 100 index was 11.6 lower at 3,714.1. The second tier stocks fared no better, with the FTSE Mid 250 index finally 9.8 off at 4,366.2.

The recent narrow trading trends in gilts continued yesterday with losses restricted to just a few ticks, mirroring the slightly softer tone of US Treasuries

Wall Street, held back by the bond market, drifted easier at the outset and gave no support to European equities. It is closed today for Independence Day.

There were, however, plenty of good performances from a number of individual stocks, the best of which was GEC, the electronics giant, which delivered top of the range figures.

The big lenders among the high street banks maintained their recent outperformance with Abbey National and Lloyds TSB both posting useful gains.

Composite insurers, on the other hand, were damaged by a press report highlighting the downward pressure on insurance premiums.

The bid buzz that gave a late push to East Midlands Electricity on Tuesday drove the shares even further ahead yesterday, with the market speculating that one of the big US utilities was about to launch a bid for the group.

Much of the afternoon was taken up in discussing the latest Extel rankings of stockbrokers and analysts, which saw NatWest Securities take cop ranking in research.

Merrill Lynch consolidated its pre eminent position in market making, followed by NatWest and Kleinwort Benson, which took joint second place.

The continuing poor performance of the Footsie future - it closed at a discount to the cash market and to fair value - was viewed with dismay by senior dealers, one of whom said: "The market is suffering from a double dose of no interest with only one way to go."

Another expected a "gradual correction".

Turnover in equities at 6 p.m. was 691.4 million. Customer business on Tuesday was worth a hefty Pounds 2.04 billion sterling.