British investors face a nerve-fraying period next week amid concerns of possible terrorist attacks on the first anniversary of September 11, this Wednesday.
Security jitters, earnings concerns and the prospect of a US-led attack on Iraq left the FTSE 100 index of leading London shares nursing a loss of 120.1 points or 2.8 per cent over the week to Friday, when it closed at 4,107.2 points.
A decision by the Bank of England to hold interest rates steady at a 38-year low of 4.0 percent had a muted impact on the stock market.
Despite a late rally fueled by a rebound on Wall Street, analysts said that the mood would remain cautious in the run-up to September 11th.
"Investors are going to be somewhat jumpy around that period," said Mr Alex Scott, an analyst at Seven Investment Management.
"We've seen hints or indications that terrorist activity hasn't disappeared altogether. "I think we'll see a fairly quiet period with investors unwilling to take big risks before that anniversary is out of the way," he said.
BNP Paribas equity strategist Mr David Thwaites added: "September is traditionally a poor month for markets and there's also a proclivity for nasty thinks to happen in September and there's going to be an obvious focus this year because of what happened on September 11 last year."
"It's reflective of a lack of confidence in the markets," he said.
On the economic calendar next week, dealers may cast an eye over British unemployment figures for August which are slated for release on Wednesday, though they are unlikely to move the market notably.
Among companies expected to release their results, aerospace group BAE Systems and steel giant Corus are both due to report on Thursday.
AFP