London's equity market kicked off the trading week on a downbeat note yesterday, suffering from a general lack of confidence in global markets and the absence of any US interest with Wall Street closed for the Labour Day holiday.
FTSE 250: 4,851.7 (-7.1); FTSE SmallCap: 2,027.8 (-14)
At the close of trading, the FTSE 100 was down 46.4 at 4,180.9, the FTSE 250 7.1 lower at 4,851.7, the FTSE SmallCap 14.0 off at 2,027.8 and the Techmark 100 8.25 weaker at 774.77.
Dealers said the market's performance was all the more disappointing because of the poor response from investors to some much-needed encouraging domestic economic news. The Chartered Institute of Purchasing and Supply's August survey of manufacturing showed an upwards move to 51 per cent, compared with July's 49.1 per cent and indicated a return to growth in manufacturing.
"The latest report is surprisingly upbeat and well above expectations," said Mr Martin Essex, at Capital Economics. "The report means that after just one month below the 50 boom/bust level, the index is back in positive territory, boding well for the official manufacturing data due on Friday and suggesting that conditions are improving in industry, though not as strongly as manufacturers would like."
But that news failed to stimulate a market still extremely nervous about the prospect of a US strike against Iraq, with all its political and economic implications, and ahead of some critical economic data on both sides of the Atlantic. Among that data is the US non-farm payroll report for August, scheduled for Friday.
As for domestic economic news, the Bank of England's monetary policy committee begins its two-day meeting tomorrow to determine interest rates. Economists expect the MPC to leave rates unchanged for a tenth month.
The main downside pressure on the London market came from three sectors: telecoms, insurers and banks. The telecoms grouping fell away, led downwards by Vodafone, whose shares reflected press suggestions that the group was planning a takeover bid for SFR, a French mobile phone company.
Turnover in equities yesterday was 1.2 billion shares, one of the lowest daily levels this year.
