The UK equity market ended lower yesterday but held up quite well in the face of a weak day on continental European bourses and a poor opening on Wall Street.
The FTSE 100 index was in negative territory for much of the session but at the close, its loss was limited to just 8.5 points, taking the blue-chip benchmark down to 5,871.3.
The weakness was concentrated in the technology, media and telecommunication sectors, which saw some profit-taking after their recent surge. Sentiment in the sectors was also affected by a sell-off on Nasdaq, which dropped more than 80 points in early trading after Merrill Lynch downgraded several leading semiconductor stocks.
The worst 10 stocks in the FTSE 100 all came from the TMT sectors while NXT, London Bridge Software and Arc all suffered double-digit losses in the FTSE 250. The Techmark 100 index fell back below 2,000 dropping 41.06 to 1,962.07.
There was little domestic news to move the markets, with no leading companies reporting. Figures showed that the government had a £37 billion sterling surplus in 2000-01, helped by the £22 billion sterling windfall from the third-generation mobile phone auctions.
The German Ifo survey appeared to confirm that Europe's largest economy was slowing. Like the Nasdaq Composite, the Dow Jones Industrial Average was lower in early trading on Wall Street. Argentina's weekend cancellation of a debt auction prompted concerns of a renewed emerging market crisis.
Turnover was quite robust for a Monday with 2.02 billion shares traded by the 6 p.m. count. United Business Media and Tesco traded the most shares.
The market has recovered from its March lows but has yet to get back to the 6,000-6,600 range in which it traded for much of 19992000. Hopes of further interest rate cuts have been offset by worries about the outlook for corporate earnings.
Credit Suisse First Boston said that UK earnings forecasts were downgraded by a further 0.7 per cent in March, with all industry groups bar resources seeing a reduction. Telecoms forecasts fell by 3.2 per cent, media by 5.8 per cent and information technology by 7 per cent.
