London's strong run ground to a halt yesterday as the reopening of the bond and currency markets after Monday's Columbus day holiday in the US brought a sharp slide in US bond prices, driving the yield on the long bond back up to 6.25 per cent. The weakness in US bonds unnerved Wall Street, where the Dow Jones Industrial Average posted a 125-point retreat not long after London closed, and also increased the pressure on London stocks.
Footsie finished the day 60 points off at 6,174.0, having fallen to a session low of 6,164.9 not long after the US trading session began.
The day's economic news could hardly be interpreted as bearish for the stock market. The September inflation report raised no alarms, with the headline inflation figure, at 1.1 per cent, and the core figure at 2.1 per cent, both seen as bullish for the market and reducing the clamour for more rate rises.
The FTSE 250 index settled 17.4 off at 5,731.7 and the FTSE SmallCap dipped 9.3 to 2,683.0. Turnover, helped by the programme trade activity, expanded to 1.13 billion shares.
