The British stock market ended the week on a losing note yesterday, with the FTSE 100 index dropping back below the 5,900 level for much of the day.
A number of factors weighed on the market during the week: nervousness ahead of the US Federal Reserve's open market committee meeting on Tuesday; some stronger-than-expected British average earnings figures; and Asian worries in the wake of the Indonesian riots and the nuclear tests in India.
The market produced a piece of home-grown bad news yesterday with the Office of Fair Trading announcement of an investigation into Northern Rock. The watchdog is probing complaints by customers about the recent restructuring of Northern Rock accounts.
The bank's shares fell more than 8 per cent on the report and, with the OFT issuing a general warning to all banks on the issue, the sector took a hit. Four of the nine worst performing Footsie stocks were banks.
Footsie opened with a modest gain, despite the latest turmoil in Indonesia and Thursday's fall on Wall Street. But the market quickly drifted lower in the absence of any domestic impetus.
For much of the day, the medium and smaller company stocks failed to escape the selling pressure. But a Houdini-style recovery in the last few minutes allowed the FTSE Mid-250 to close up 2.2 at 5,797.8, yet another all-time high. The SmallCap, which was never ahead during the session, closed unchanged at 2,749.2
