After two consecutive three-figure gains in the FTSE 100 totalling more than 300 points or better than 5 per cent, London's equity market ran into a flurry of profit-taking yesterday, leaving all the main FTSE indices lower on the day. And there was additional downside pressure being exerted on the stock market because of a batch of slightly worrying economic news on inflation and the public finances.
These were interpreted as diminishing the chances of another substantial reduction in British interest rates after the next meeting of the Bank of England's monetary policy committee, scheduled for February 4th.
The leaders managed to finish the session above their lowest levels of the day - but only just - thanks to continuing speculation on bids. An early secure-looking performance by Wall Street which was closed on Monday for Martin Luther King day, subsequently gave way and saw the Dow Jones Industrial Average facing a three-figure decline, having been up as much as 60 points shortly after the opening.
The FTSE 100 index ended another volatile session a net 96.3 easier at 6,027.6, having hit a session low of 6,016.4. The FTSE 250 settled 29.2 off at 4,874.6, while the FTSE SmallCap was finally 3.1 off at 2,102.9.
Turnover in equities remained at relatively high levels, eventually reaching 1.08 billion shares at the 6 p.m. cut-off point, the sixth consecutive 1 billion-plus figure.
