A London stock market seen by most dealers as on the verge of recouping some of its earlier losses was temporarily hit for six by news that Mr Robert Rubin, the US treasury secretary, was resigning.
Confirmation of that news saw Wall Street come in under massive pressure, with the Dow Jones Industrial Average plummeting over 200 points. It also disturbed the London market, where the FTSE 100 index, then down about 30 points, fell almost three figures.
But markets regained their nerve as quickly as the semi-panic had set in. By the close of trading, the FTSE 100 had stabilised and closed only 35.2 lower at 6,343.1. The FTSE 250 index finished 43.1 down at 5,806.9. The FTSE SmallCap was similarly pressured, closing 4.6 off at 2,581.8; at its worst, the SmallCap hit 2,581.5.
An earlier attempt to drive equities higher at the outset of trading quickly ran out of steam, with the main indices sliding away.
There were no really worrying developments affecting the market, simply a series of niggling concerns. Those included the sacking of the Russian prime minister, which was viewed as adding to the tensions surrounding the conflict in the Balkans.
The Bank of England's quarterly inflation report contained no real surprises. It forecast inflation would be below the government's 2.5 per cent target next year but will pick up over the next two years. Turnover in equities reached 1.26 billion shares.
