AN early burst of strength in London's equity market, prompted by a good rally in gilts and a fresh round of takeover speculation, was eroded in mid-session and shares closed only modestly higher yesterday.
The FTSE 100 index finished 10.0 firmer at 4,661.8, but well below the day's best level of 4,672.7, recorded shortly after the start of trading.
The FTSE All-Share index rose 4.0 to 2,216.7 and the FTSE Mid-250 5.2 to 4,506.7 but the SmallCap, which struggled all day, eased 0.2 to 2,299.8.
It was a dramatic week in the market, with another big shake-up at the Bank of England followed by the Federal Open Market Committee meeting in Washington after which US interest rates were left on hold. Global markets were relieved at the Fed's inaction but London stocks remained nervous all week, with some fund managers increasingly uneasy at the prospect of a tax-raising Budget.
British shares lost ground over the week, with Footsie down 32.1 over the five days, the All-Share 14.28 lower, the Mid-250 19.0 off and the SmallCap down 16.99.
The stock market's initial upward move yesterday was fuelled mostly by further exceptional gains in the financial areas, which gave another enthusiastic response to news that the unofficial "grey market" price of Halifax shares had reached 700p late on Thursday, the first day of trading on that market. Alliance & Leicester, the catalyst for the upward spiral in bank shares in recent months, was heavily bought.
