The London market suffered another day of losses yesterday with the leaders bearing the brunt of the pressure. Weakness in the second-liners and small caps was much more muted.
The negative mood followed Thursday afternoon's downturn when Wall Street's weakness, in the wake of a handful of profit warnings, notably DuPont, spooked all Europe's markets. The US market opened poorly yesterday. Asian markets also fell back quite sharply, reflecting renewed weakness in the Japanese yen. There were additional worries about Russia.
Despite the Bank of England's monetary policy committee leaving British interest rates on hold on Thursday, many analysts expect that interest rates will have to go up at least once more this year.
Dealers were again quick to point to the recent spate of earnings downgrades and profit warnings, most of which have been linked to the Asian crisis, sterling's strength and the prospects of a recession, as adding to the problems besetting the market. Others continued to adopt the view that the market simply does not feel comfortable above the 6,000 mark on the FTSE 100.
Market-makers remained concerned about the current levels of Footsie.
At the close, the FTSE 100 index was left with a 40-point decline at 5,929.7, leaving the index a net 58.7 or 0.6 per cent off over the week. The FTSE 250 settled only 4.5 easier at 5,628.8 while the FTSE SmallCap fell 7.9 to 2,578.9.
