ANOTHER volatile opening by Wall Street put a sizeable dent in an earlier rise in an always fragile British equity market.
Ever-present worries about the US budget deficit wrangle plus persistent suggestions that international funds may be in the process of reducing weightings in the US and shifting money into the far east and continental Europe were said to have had an increasing impact on markets.
Wall Street initially moved sharply higher, with the Dow Jones Industrial Average posting an early rise of over 20 points but then falling sharply to show a 40-point fall an hour after London closed.
Other European equity markets, such as Frankfurt and Paris, delivered much more convincing performances than London, giving additional credence to the talk of switching across Euromarkets. Frankfurt hit an all-time high and Paris held on to strong early gains. Dealers in London said recent weak economic data from Germany had increased the chances of an early rate cut by the Bundesbank.
There was some support for British equities from the gilts market where the 10-year issue ended a relatively quiet session around seven ticks higher, after being 12 ticks higher?
Over the week, which saw the Dow producing a two-day decline of 160 points as the budget deadlock unnerved international investors, the FTSE 100 registered a 47.2 decline. The FTSE Mid-50 was 46.6 lower over the same period.