MOUNTING downside pressures on gilts and a widespread lack of European markets about Wall Street's ability to build on its post-election surge exacted a heavy Boll on the equity market.
An early mark-up of stocks, in response to Wednesday's 96-point jump in the Dow Jones Industrial Average, was reversed within minutes of the opening of the market as gilts attracted fresh waves of selling pressure.
At the end of a day of erratic movements in leading stocks, the FT-SE 100 index just managed to close above the psychologically important 3,900 level, although it briefly dipped below it on a couple of occasions. It finished almost 1 per cent down and its lowest level since September 6th.
Footsie has now fallen 172.7 points since reaching its all-time closing high, 4,073.1, on October 21st, burdened by a rise in interest rates and the prospect of more increases in rates.
The gilt market gradually lost heart yesterday and eventually closed with losses of more than a point at the long end.
There was some comfort for the markets in a good rally on Wall Street, where the Dow quickly recovered from an early 20-point fall and was hanging on grimly to a small rise some 90 minutes after London closed.
Utilities attracted keen interest with water stocks responding to hopes that Labour's proposals for a "windfall profits" tax might run into legal opposition. The excitement in the recs, triggered by US bid news in East Midlands, fizzled out after Dominion Resources said it was unlikely to pay more than 608p a share.
