BRITISH equities were stranded yesterday after a heavy downside pressure on the FTSE 100 Index. Adding to the pressure was the decline in sterling and gilts, in the wake of the hardening British government stance against the European Union over the ban on British beef exports.
"The worry in the market is that Mr Major may have brought a general election date forward by turning up the heat on Europe," said one dealer.
The political pressures were increasingly evident in the utilities sectors, which are vulnerable to shifts in political trends. One of the market's most powerful broking firms, Kleinwort Benson, drove the sectors lower by some aggressive market making at the outset.
At the close of a difficult day, the FTSE 100 index was left with a 25.2 point loss at 3764.2. The market's second line stocks were also given a rough ride, with the FTSE Mid 250 index only just outperforming the 100 and posting a 16.9 fall at 4512.3.
It was not all bad news for shares, however. The retailing sectors, both general and food, provided a number of outstanding performers, as did brewing.
Bass topped the Footsie performance table, with the shares adding 2.5 per cent in the wake of better than expected interims and an encouraging statement on second half prospects. Hard on the heels of Tuesday's excellent numbers from Marks & Spencer, Kingfisher pleased the market with good first quarter sales, prompting a good showing from other retailers such as Dixons and Argos.
The big food retailers posted good gains after one leading broker adopted a bullish stance on Sainsbury.
On the downside, however, the financials and utilities were given a rough ride, with the absence of any of the much rumoured bids causing another day of persistent selling pressure and profit taking in the banks and insurances.
In a bruised banking sector, Standard Chartered held up well in the wake of an earnings upgrade by Cazenove, the bank's stockbroker, but NatWest suffered at the hands of its broker.
The FTSE 100 index was in negative territory from the off, burdened by a poor showing by Wall Street, where the Dow Jones Industrial Average gave up 12 points.
With the future trading at a discount to cash all day, market makers kept on the downside pressure throughout the session and Footsie moved progressively lower as the day wore on, only just managing to edge off the day's trough during the final hour of trading.
Turnover in equities at the 6 p.m. calculation was 806.1 million shares. Retail business on Tuesday was worth £1.83 billion sterling.
