A US-inspired sell-off in the technology, media and telecom areas largely caused the generally poor performance by London's equity market yesterday.
The SmallCap was the only FTSE index to show a gain on the day, while the severest pain was felt, predictably, by the Techmark 100 index, which suffered its first substantial setback for 10 trading sessions.
The FTSE 100, 250 and All-share indices were never under any really severe pressure, but dealers noted a persistent flow of small selling orders, which ensured negative trends in those areas.
The general view among traders was that the London market had run out of steam after its mighty efforts of the past couple of weeks which have seen the FTSE 100 rally strongly after dipping below the 6,000 level on at least two occasions.
They said that moves above 6,600 bring out lines of stock from institutions.
The fundamentals in the market yesterday were barely changed. The Bank of England's monetary policy committee left British interest rates on hold, as expected. In addition, there were no shocks from the latest economic data.
The downside pressures came from the US overnight, where the Dow Jones Industrial Average dropped 79 points, having been down three figures at one point, and the Nasdaq composite fell 65 points.
Remarks from one of the leading figures on the US Federal Reserve's open market committee, Mr Robert Parry, president of the San Francisco Federal Reserve, appeared to undermine the recent hard-won confidence in global markets.
Mr Parry said it was premature to take the view that the battle against inflation had been overcome.
Wall Street showed little inclination to rally yesterday, the Dow nudging higher at the start of the session, only to fall away just as quickly.
The FTSE 100 index was finally 43.0 lower at 6,503.8, having dipped below the 6,500 level to 6,476.4 at its worst. The FTSE 250 eased 19.1 to 6,467.9, while the Techmark 100 finished 123.1 down at 3.515,97, after 3,505.41. The SmallCap, on the other hand, moved up 11.3 to 3,280.2.
Eleven of the worst 12 performances in the FTSE 100 index were chalked up by TMT stocks, the one exception being Abbey National, whose shares were badly affected by the mortgage initiatives from Standard Life and Nationwide.
