What began as a week full of promise for London's equity market, ended with all the indices under downside pressure, none more so than the FTSE 100 which dropped back below 6,200 one of its perceived crucial support levels and looked increasingly vulnerable.
The FTSE 100 ended the day 41.1 lower at 6,165.0, having slipped to a session low of 6,152.1. And the other indices were similarly depressed, with the FTSE 250 finally 30.8 down at 6,757.5 and the FTSE SmallCap 7.7 off at 3,316.8. The Techmark 100, representing the technology sector, lost 53.38 at 2,587.95.
The latest weakness in the 100 index set investors' nerves jangling, with the next downside support level said to be the 6,000 mark. "That will be the market's big test, if we go down further," said one market-maker.
At the start of the week, there were hopes that London would make progress given the much-hoped for cut in interest rates, duly delivered by the Bank of England's monetary policy committee on Thursday.
In the event the 25 basis points reduction in British domestic interest rates, the first shift in rates for a year and the first cut for 20 months, took place against a background of marked weakness in the TMT sectors.
Once again the main trigger for the latest retreat was another stumbling performance by Wall Street overnight, where the Dow Jones Industrial Average lost 66 points and the Nasdaq Composite dipped another 45 points to its lowest level for around a month.
And there was no respite for US stocks at the outset of US trading yesterday which saw the Dow off another 57 points shortly after London closed and the Nasdaq down 60 points.
With the weakness in US techs/telecoms coinciding with a sequence of bearish news affecting the UK telecoms, which have such heavy weightings in the FTSE 100, the index was always under downside pressure.
BT shares were hit yesterday by fears that the company might have to resort to an emergency rights issue to carry out its promise to reduce its burden to £10 billion sterling by the end of the year.
