There was more evidence yesterday of the London market's reluctance to make any decisive move past the 5,000 level on the FTSE 100 index, with an early attempt to drive the index higher foundering in mid-session.
And with dealers and market-makers talking of clear evidence of some switching out of equities and into gilts, a move highlighted in a recent Merrill Lynch survey, Footsie carried on down to close at session lows.
A further depressant for London, as well as other European markets, was some strong economic news from Germany, plus a poor opening performance by Wall Street, all of which brought renewed uncertainty to markets.
Footsie finished at the day's lowest point, down 45.3 at 4,905.3, and was described by one market-maker as "looking more than just weary; it looked absolutely worked out". The FTSE 100 index has now fallen 89 points, or 1.8 per cent, over the past three sessions.
There was also more talk around the market about the forthcoming shift from "quote-driven" to "order-driven" trading in FTSE 100 stocks as from October 20th, a move which has led to a general reluctance by the big market-making firms to take on big lines of stock, which they may be unable to unscramble as the shift in trading gets closer.
Others also put forward the theory that the approaching 10th anniversary of the October 19th "great crash" of 1987 will put off potential buyers of equities.
Dealers tended to dismiss the 10th anniversary story as "nothing more than fantasy". One senior trader said: "There were fundamental arguments for the 1987 decline. That is not really the case this time round." But he conceded that a correction in global markets might not be too far away "if US interest rates are nudged higher".
Second-line stocks were easier, but nothing like as weak as the front-line issues, with the FTSE 250 settling 12.3 down at 4.664.7. Smaller stocks, in sharp contrast to the leaders, managed to make limited progress. The SmallCap index edged up 1.6 to 2,281.2.
The market kicked off on a quietly firm note, bolstered somewhat by Wall Street's modest Tuesday gain, but after pushing up 14 points in the first hour of trading, quickly faltered and ran back for the rest of the session.
There were pockets of selling pressure in the market all day, niggling away at share prices and causing constant concern to market-makers.
Sentiment took a dip in the early afternoon when the Dow Jones Industrial Average opened under pressure and gradually gave way to post a 60-points fall not long after London closed.
Quarterly changes to the FTSE 100 index saw five winners and five losers, with Norwich Union, Billiton, Woolwich, Sun Life, and Williams included at the expense of Tate & Lyle, Hanson, Imperial Tobacco, Mercury Asset Management and Burmah Castrol.
