There was further evidence yesterday of a "flight to quality" as gilts raced higher and London's equity market sustained heavy losses for the third consecutive session.
The FTSE 100 index, the London market's leading benchmark, finished the session a net 65.30 lower at 4,990.3.
It was its third consecutive decline, and its lowest level since December last year, as Asian and European investors fretted over the implications of the screening of the videotape of President Clinton's testimony over the Lewinsky affair. Over the past three sessions the index has fallen 301.4, or 5.7 per cent.
But London's close was well above the session's low, 4,899.0, down 156.0.
Wall Street began the session under heavy downside pressure, with the Dow Jones Industrial Average posting a three-figure loss not long after trading commenced, as US investors braced themselves for the screening of the Lewinsky video.
Hard on the heels of the profit warnings from Bass, RMC and Shell, to say nothing of the alarm sounded by Alcatel of France, which impacted heavily on GEC, came another warning from a FTSE 100 constituent, EMI, which informed the market that its interims would be down around 20 per cent on the same period last year, after a significant deterioration in several overseas markets.
The problems affecting the leaders saw dealers quick to adopt defensive measures in the rest of the stock market where the secondliners and smallcaps, already burdened by a series of profit warnings in the recent past, had to cope with a market-wide markdown.
