A mixture of the "Greenspan effect", the recent spate of profit warnings, recession fears and worries about higher domestic interest rates continued to bear down heavily on London's stock market yesterday, with all the leading indices posting substantial losses for a fourth straight session.
Dealers insisted the market would have fallen much more heavily without the cushion of exceptionally big gains across the utilities sector in the wake of the £1.3 billion sterling bid for Wessex Water from US group Enron.
British Aerospace also did its best to stem the market's downside tide, its shares climbing over 5 per cent in the wake of news that great strides towards rationalisation in the European defence industry are being made.
London's latest slide, which saw the FTSE 100 dip below the 5,900 level, was provoked by another worrying overnight performance by Wall Street where the Dow Jones Industrial Average posted a 195-point retreat, taking it below the 9,000 mark.
At the finish of a day of big swings but generally low stock market volumes, the FTSE 100 settled 83.9 lower at 5,892.3, extending the decline over the week to 281.7, or 4.6 per cent, and more than wiping out the sharp gains of the previous week. The FTSE 250 index lost 52.3 to 5,520.6, down 133.1, or 2.3 per cent over the week, while the FTSE SmallCap took an even more severe pasting, closing 30.0 or 1.2 per cent down at 2,520.0, a fall of 2.7 per cent over the five-day period.
