AN early powerful showing by British equities was blown to pieces by the close of trading yesterday as the market was hit by a series of damaging blows.
These included stronger-than-expected economic news from the US which hit the Treasury bond market and Wall Street, and a statement from the British government emphasising it will enforce its golden shares regarding the two English generators, National Power and Powergen.
Other factors contributing to the market's increasing vulnerable position included a profits warning from Great Universal Stores and a growing feeling among dealers that the outcome of the local elections could be even worse than some of the archdoomsters have been predicting.
And political rumours grew in intensity as the day wore on, with talk of a snap general election in June also circulating around the City's trading desks.
Up more than 23 points and seemingly comfortably clear of the 3,800 level in mid-morning, the FTSE-100 index subsequently plummeted to end a shock-laden trading session a net 29.6 lower at 3776.4. The damage across the market was much less severe in the second-liners.
What could well be the blow that causes most damage to the market was delivered after it closed. It was the news that the long-running merger talks between British Telecom and Cable & Wireless have been terminated.
