British stocks had to contend with another stormy session yesterday, buffeted by some bad news from Wall Street and by a fresh bout of weakness in Hong Kong. However, London finished the day well above its lowest levels, as the US market stabilised in later trading.
The FTSE 100 Index settled 35.2 down at 5,263.7, having fallen over 76 points at its worst, just before Wall Street began trading. The US market had to endure a difficult start to the day in the wake of a higher-than-expected retail sales figure for September, which showed a rise of 0.3 per cent.
The market's concerns about global events meant the selling pressure in London was not simply confined to the leaders. The second-liners, which have proved extremely resilient in the face of numerous sell-offs in the top 100 stocks, gave ground yesterday, with the FTSE 250 slipping 8.0 points to 4,935.8.
Smaller stocks gave another demonstration of catch-up, as the FTSE SmallCap nudged up a further 2.6 to an all-time closing and intra-day peak of 2,393.7.
Ironically there was no market-shattering news from the two speeches delivered in the US on Tuesday by Mr Alan Greenspan, chairman of the US Federal Reserve, who had previously rattled the confidence of global markets by comments which implied the need for US interest rate rises.
It was not the performance of the Dow Jones Industrial Average, which finished 24 points higher on Tuesday, but disappointing third-quarter numbers from Intel, one of the US market's high-tech "darlings" of recent years, that spooked sentiment across European markets.
And the latest sell-off in Hong Kong, where the Hang Seng dropped in excess of 3 per cent, extending the decline in that market to over 11 per cent since the start of the month, caused ripples of unease in London.
Next Sunday's 10th anniversary of the Crash of October 1987, which saw the Dow plunge 22 per cent in a single session and London over 20 per cent in two days, also brought back painful memories.
