The focus of the British equity market's attention remained firmly on the second-liners and small cap issues yesterday with the leaders languishing through much of the session, although they picked up during the final minutes. A late calculation of the FTSE 100 saw the index finish a net 5.9 higher at 5,992.4. Only a minute before the official 4.30 p.m. close the Footsie clambered into the black. After a delay of over half an hour, said by the Stock Exchange to have been caused by a "technical glitch", the final FTSE 100 figure was announced.
The front-line stocks were never really pressured, rather they were simply ignored by the institutions, which preferred to seek out value in the FTSE Mid-250 and SmallCap arenas.
But there was genuine good demand for the stocks making up the junior indices, both of which continued their sequence of record closing and intra-day records.
Dealers said the leaders were "unhappy but never totally dejected" as one put it. "We were unsettled by worrying performances from Wall Street and the Asian markets, but a quick glance at turnover levels shows that any selling was on a very small scale," the dealer continued.
Activity in the non-FTSE 100 areas accounted for 62 per cent of overall business, where the total reached 860 million shares by the 6 p.m. cut-off point.
The FTSE Mid-250 index extended its run of good performances, ending the day up 23.1 and penetrating the 5,700 level in the process, finishing at 5,705.4. At its best, the Mid-250 index hit an intra-day record of 5,706.5.
The FTSE SmallCap delivered a mirror image of the Mid-250 index performance, gradually moving ahead to hit new intra-day and closing peaks, and finishing a net 10.8 ahead at 2,676.1.
Sentiment in the leaders was hampered from the outset by worryingly weak performances from Wall Street and most of the Asian markets.
Wall Street's Dow Jones Industrial Average slipped 45 points on Tuesday evening, on a mixture of concerns about corporate profits and a return of the interest rate worries that most traders had tended to shift to the back burners over recent sessions. And the Dow came under renewed pressure yesterday, sliding around 40 points not long after London finished trading for the day.
Adding to dealers' worries was a generally poor showing by Asian stock markets, where Tokyo prompted plenty of jitters, finishing over 2 per cent lower. Hong Kong fell back, but not as much as Tokyo, while Seoul dipped around 4 per cent.
News of merger discussions between Daimler-Benz of Germany and Chrysler of the US was a major talking point in the market and induced some keen interest in many motor/engineering stocks, among them British Aerospace, Smiths Industries and GEC.
Other bull points for the market included a welcome return to the FTSE 100 out-performance table by J. Sainsbury, after warmly received results, and persistent talk more merger and acquisition stories are about to burst on the market.
