THE FTSE 100 index's recent rally ran out of steam yesterday despite another set of decent corporate results and a £470 million share buy back from Barclays Bank.
A late rally just allowed the leading index to record its fifth successive daily gain, but the rise was a measly 0.1 to 3788.4. The FTSE Mid 250 index managed a 5.1 point increase to 4293.5.
After better than expected figures from HSBC and Pearson on Monday, it was the turn of British Petroleum and Barclays to please the market. Shares in the latter turned the best Footsie performance, helped by the effect of the bank's third buy back programme in recent times. Much of the rest of the sector got a lift from Barclays' performance.
The main disappointment came from Zeneca, the pharmaceuticals group, where profits were in line with expectations but the company was cautious about cost pressures in the second half. The group also once again played down merger hopes.
Mr Richard Jeffrey, Charterhouse group economist, said "broadly speaking, the results season has been towards the upper end of expectations. There have been exceptions but mainly in the smaller company area."
Yesterday's corporate news held up the market in the face of a weak opening on Wall Street, where the Dow Jones Industrial Average was 16 points lower at the close of London trading.
Investors were also inclined to be cautious ahead of the publication today of the Bank of England's inflation report, which is expected to argue that interest rate cuts would damage the chances of meeting the government's inflation target.
Short sterling futures, the market's vehicle for speculating on rates changes, are looking for base rates to remain at 5.75 per cent until the end of the year and then to increase to 6 per cent by March 1997.
Footsie was in the red for much of the session and, at its worst, was 12.9 points down at 3775, .4. But gilts remained supportive, with the benchmark 10 year issue around three ticks ahead by the close of trading.
The mystery of Monday's reported 666 million trade in Just Group, an AIM quoted stock, was unsolved. The trade was obviously an error, since it represented more than five times the company's market capitalisation. But by yesterday morning, the trade had disappeared from the Topic news screens as efficiently as photographs of Trotsky vanished from Soviet history books in the Stalin era.
Two perplexing questions arise from the affair. How did a trade equal to more than half the exchange's daily turnover (in terms of number of shares) get reported without any apparent attempt to check the figure? And how did it disappear again without any explanation?
