There was more than just a touch of anti-climax in London's equity market yesterday as initial hopes of a continuation of the recent surge in the telecoms, media and technology - or TMT - sectors evaporated profit-takers moved in.
The sell-off in the TMTs came amid some frantic activity in Vodafone Group, whose shares dipped and then rallied, and in some of the software stocks, spearheaded by Sema, whose figures proved a substantial disappointment to the market after close scrutiny.
Adding to the rather gloomy performance yesterday was an underlying nervousness among traders about domestic interest rates, the reopening of US markets after the long Labor Day weekend and the regular quarterly meeting to decide the ins and outs of London's benchmark index, the FTSE 100.
If that wasn't enough, some marketmakers insisted last week's sudden rally, which triggered a massive 14 per cent rise in the Techmark 100 index, had taken the market completely by surprise and uncovered several short positions which have now been filled in.
Wall Street, too, refused to come to London's aid. The Dow Jones Industrial Average took some time to make up its mind at the outset yesterday, nudging backwards and forwards and then slipping to post a 54 points decline not long before London closed.
The Nasdaq Composite, a trend-setter for London's Techmark 100 index, gave a determined thumbs down, sliding over 70 points, depressed by broker downgradings of Intel Corporation, one of leading US computer chip makers.
When the curtain fell on a session which saw turnover, rather surprisingly, shrink from recent levels, the FTSE 100 index was left a net 45.6 lower at 6,752.5. At its best, minutes after the opening, the index was up 11.4 and back above the 6,800 level. At its worst, however, the index showed a 60.5 decline at 6,737.6.
But the rest of the FTSE indices suffered much more severe losses, most, but not all, emanating from big falls in TMT-related stocks.
The Techmark 100, lauded by speculators after its spectacular showing last week, was on the wrong end of market activity yesterday and plummeted 184.0, or 4.3 per cent. The biggest losses came in the software stocks.
And the FTSE SmallCap gave up 12.8 to 3,616.3, dogged by a sprinkling of poor performances by tech stocks.
Some dealers, disappointed that the market's runaway performance in recent days, had hit the buffers, said the shift in sentiment was only temporary. "If the mpc sits on its hands, as most people expect, and Wall Street behaves, then the market remains a buy", said one.
