THE ever increasing pressure on the Government, and the possibility of a snap general election, coupled with renewed volatility on Wall Street, undermined sentiment in British equities yesterday.
The FTSE 100 index closed a disappointingly quiet session only 0.3 higher at 3,740.3. Over the week, the index has fallen 30.6, burdened initially by steep falls in international bonds, but also because of growing political worries in Britain.
News that Mr Peter Thurnham, MP for Bolton North East, had resigned the Government whip prompted widespread worries that Monday's parliamentary debate over the Scott report could see the Government come close to defeat.
The gloom did not penetrate fully throughout the market, where second liners attracted good buying interest. Good performances among individual stocks saw the FTSE Mid 250 finally close above the 4,200 level, up 10.3 at a record close of 4,208.0. In contrast to Footsie, the Mid 250 index made progress over the week, ending 8.1 higher.
London's reluctance to follow Wall Street into uncharted territory was clear from the outset. Market makers, conscious of London's recent reluctance to chase Wall Street, lifted their opening quotations, but reported only small scale institutional buying.
Consequently, share prices embarked on a gradual decline which saw the gain in the Footsie finally wiped out in mid afternoon, before a mild rally left the index fractionally higher on the day.
