There was a much better feel to London's stock market yesterday, with all the main indices making progress for the third consecutive session, despite the ongoing concerns about a possible US reprisal attack against terrorists involved in the attacks on the US and a volatile opening to Wall Street.
Market observers acknowledged that although there remained the huge concern of the potential damage to global market sentiment of any large-scale military strike in the Middle East, the mood in London had taken a decisive turn for the better.
"We all know there is bad news on the horizon, but after Friday's scare, every passing day brings a perceptible improvement in market sentiment", said one trader who has witnessed the worst of the bear markets of the early 1970s, the 1987 crash and the recession of the early 1990s.
"It does feel as if we've seen the worst of the immediate elements of what was a very scary storm. We might not have hit bottom in the current bout of unpleasantness but I don't think the pain will drive the market that much lower", he said.
The general view among market traders was that the profit warning from EMI was only the start of many; "don't be surprised to see a flurry of profit warnings in the short term; now is the time to get all the bad news in the share price; and there is evidence that that is exactly was is going on now".
The FTSE 100 index ended another tense session in reasonably good form and up 32.7 at 4,696.1, having driven through the 4,700 at various times during the day. At its best, shortly before Wall Street came in, the index was 51.6 up at 4,715.0. The index has recovered 262.4, or 5.9 per cent during the past three trading sessions.
It was the US market's resilient performance on Tuesday evening when the Dow Jones Industrial Average closed 56 points to the good that provided the backbone for London during a rather uncomfortable first hour of trading.
And London tended to shrug off some mid-afternoon tremors from Wall Street yesterday as the Dow saw an initial 56 points gain turned into a three-figure fall not long after London marketmakers closed their trading books.
