THE UK stock market was caught with a swift "one two" combination punch yesterday as a downturn in European bourses hit sentiment in the morning, followed by a sharp fall on Wall Street in the afternoon.
Meanwhile, within the overall market decline, there were signs of a shift in sector preferences, with investors taking profits from the financials sector and switching into the engineering stocks.
The FTSE 100 index shed 51 points to 4,621.3 while the 250 index dropped 12.4 to 4,495.8 and the SmallCap shed 4.7 to 2,294.2.
When the trading session started, there was little sign of the turmoil to come. Footsie opened 4.7 points ahead at 4,677.0 and after a quarter of an hour had reached its high for the day of 4.684.2.
Rut the losses on European markets soon started to take their toll. Continental bourses were hit by opinion polls pointing to a Socialist Communist election victory in France and by the aftermath of the row between the Bundesbank and the German government over the revaluation of gold reserves.
At its worst, the leading index was down 76.4 at 4,595.9 but it recovered some ground when the Dow Jones Industrial Average rallied from an early 80 point fall to be 37 points down at the London close.
Volume picked up, after some quiet days earlier in the week, to reach 767.7 million shares at the 6 p.m. count, of which 56 per cent was in non- Footsie stocks.
