A RESILIENT opening performance by Wall Street arrested a disturbing slide in British equities, which were described by one top trader as suffering from the market's own special form of BSE bid speculation exhaustion.
The absence of any of the much hyped takeover stories, which have been the main driving force in the market recently, plus increasing twitchiness about Thursday's local elections, and Friday's non farm payroll figure in the US, added to the dreary tone of the market.
Rumours that a sizeable sell programme had hit the market in mid morning were shrugged off by market makers, who pointed to the low level of trading activity throughout a dismal trading session.
At the end of the session the FTSE 100 index was left with a 23.6 fall a 3,809.2. The FTSE Mid 250 index, which has tended to ignore the various setbacks affecting the senior index over recent weeks, succumbed to flurries of profit taking.
Senior market makers said the market had finally run out of patience over the promised "bid bonanza" and become increasingly uneasy over the political situation in Britain.
At one point during the day the City's trading desks were buzzing with speculation that the expected humiliation of the Conservative party in Thursday's local elections would promote another crisis in the government and see the Prime Minister hand over the reins to Mr Michael Heseltine.
Although few took the story too seriously, the damage to market sentiment was evident from the outset, when the Footsie quickly gave up an early small rise and thereafter came under increasingly heavy downside pressure.
Matters were not helped by the publication of some downbeat economic news, especially that for first quarter gross domestic product, which at plus 0.4 per cent was below consensus forecasts of around plus 0.6 per cent.
Dealers said they did not expect much in the way of fireworks this week unless some sizeable bid news emerges. "This market feels increasingly heavy and tired and could easily dip below Footsie 3,800 if Wall Street loses heart," said the head trader at one of the large European securities houses.
He warned that the market would have to contend with two big hurdles in the local elections and the US payroll report, and pointed out that the US news could provide a big shock to the market. The impetus behind the British market, bid situations and the prospect of more to come, was becoming increasingly murky, he said.
Turnover in equities reached 673.5 million shares, with non-Footsie stocks once again accounting for more than 65 per cent of overall activity in the market. Customer business last Friday was valued at £1.95 billion sterling.
On a day when winners were few and far between, shares in Manchester United, Britain's leading football club, reached a new record high after extending its lead at the top of the English Premier League, and looking odds on to qualify for the lucrative European Champions League.
