WITH nothing to play for but football and tennis, London's equity dealers and investors kept a low profile for most of yesterday.
It was left to the futures traders to sell the derivatives contract on the Footsie and take the underlying market with it.
One senior sales specialist commented "People have got their buying boots off. They're happy to buy on weakness but they need that weakness in order to be pulled in.
However, at 6 p.m. the delayed reporting system showed that the day's turnover had reached more than 772 million shares. That was the highest level for well over a week and far higher than on Monday, when customer business was worth only £1.6 billion. It was largely accounted for by late dealing in National Grid, which had turnover of 88 million shares.
In one sense, the early lack of British interest was slightly surprising as it followed a strong performance on Monday night from the Dow Jones Industrial Average, which also came in steadily at the beginning of US trading yesterday.
It was also surprising in the light of a comfortable performance from sterling, gilts and other European equity markets.
On the other hand, the market torpor bad its predictable side. The City tends to rate sport above most things, and Euro 96 football fever has smitten most dealers, while the opening matches at Wimbledon absorb the remainder.
Also, there is very little positive news to latch on to. The recent interest rate cut is seen as being the last, at least for some time. Earnings downgrades are replacing upgrades and this week offers no genuinely significant economic data.
Consequently, traders in the derivatives market took the opportunity to sell heavily and at some points during the day, the futures contract on the Footsie was priced almost 20 points below its estimated fair value premium.
It was the future that dragged Footsie down by 26 in the morning while late equity selling was seen as being responsible for the market's afternoon fall which pushed the FTSE 100 index down again to close 31.3 lower at 3,679.5. The FTSE Mid 250 Index fell 48.8 to 4,384.5.
Most of the weakness was attributed to investor boredom combined with market makers cutting their prices in order to find a level where some of the less jaded institutions might become interested.
There was also a growing feeling of fatigue as the quarter drew to a close. The majority of institutional investors appeared to be concentrating on writing their first half reports rather than using their liquidity to buy stocks.
Mr Geoffrey Dicks, the economist at NatWest Securities, believes the Chancellor of the Exchequer is getting nervous that his attempts to host a Lawson style "party" are not being returned by the electorate.
But not everyone is suffused with gloom. Mr Richard Jeffrey, the economist with Charterhouse Tilney, is still confident that a traditionally dull June will herald a late flowering in July when the market could "attempt to scale the 4,000 level".
