MORE evidence of a slowing British economy, via the latest Confederation of British Industry survey, gave a lift to gilts but failed to trigger any significant action in equities yesterday.
The promised fireworks in the market, with the "triple witching" expiry of FTSE 100 and FTSE Mid-250 futures and FTSE 100 index options, fizzled out quickly.
The FTSE 100 index ended a stock market week which was badly affected by a series of sporting events, in subdued fashion and down 5.2 on the day at 3,722.3. The FTSE Mid-250 index was also depressed, closing the session 9.12 off at 4,440.7.
Gilts were always in good demand, taking heart from the CBI survey which pointed to subdued output and insignificant price pressure. The survey led dealers to adopt the view that a further reduction in British interest rates may well be on the cards in the next couple of months, if the economy continues to show evidence of weakness. The 10 year gilt ended the session 17 ticks ahead and the 20 year gilt was around 25 ticks up on the day.
Discussing the equity market, the head trader at one of the big European securities houses said he expected the general lack of institutional activity to carry on in the short term.
