Another bad start on Wall Street, with the Dow Jones Industrial Average dropping below 10,000 in early trading, ensured the third consecutive losing session for British equities yesterday.
Even an interest rate cut from the European Central Bank did little to stem the tide. The one-quarter percentage point cut caused a brief jump in the FTSE 100 index but had been widely expected by analysts. It then became clear that Wall Street was going to open lower and Footsie reversed direction.
An early 50 point fall in the Dow was followed by a brief rally before the serious selling set in, driving the Dow below 10,000 for the first time since April. Weak US consumer spending numbers plus bad corporate news from Sun Microsystems and Corning pushed Wall Street lower, with the Nasdaq Composite also falling to its lowest level since April.
By the close in London, Footsie had dropped 84.9 to 5,332.7, only a little above the bottom of its recent trading range. The FTSE 250 fell 41.3 to 6,117.1 and the SmallCap 8.0 to 2,717.2.
The worst performer of all was the Techmark 100 index, which fell 50.18 to a new low of 1,449.22. The index, which was established in November 1999, has fallen almost 75 per cent from its March 2000 peak.
The damage was broadly spread across the market yesterday. Just 13 FTSE 100 stocks gained ground and, of those, only three managed a rise of more than 1 per cent.
The biggest casualty among the blue chips was Spirent, which issued a second-half profits warning and announced job cuts. But Telewest and Colt Telecom also suffered double-digit losses and technology, media and telecom stocks made up nine of the worst 10 Footsie performers.
On the economics front, there were further signs of the improved health of the consumer sector. British consumer borrowing in July was higher than the markets were expecting, with a rise of £1.7 billion. Secured lending rose by £4.5 billion, the highest monthly figure since the series began in 1993.
Turnover picked up sharply from previous levels, with the help of a particularly busy day in Vodafone, sparked by the early release of figures for rival mobile network Orange. Overall, some 2.41 billion shares were traded by the 6 p.m. count.
