Equities fell each day last week with Footsie recording a near 170-point fall and the supporting FTSE 250 index losing 143. The retreat was not, of course, entirely due to the Major/Blair confrontation. Interest rates were a strong influence.
Speculation rates will go up in the US this week and soon after polling day there will be a savage hike here is hardly calculated to inspire confidence.
It would be easy to blame the prospect of dearer money for the decline. There does, however, appear to be evidence that election jitters are starting to haunt the stock market.
The number of bargains completed in the last five trading days was intriguingly high; and share turnover was also eye-catching.
It was the result of election worries and tax considerations. Stockbrokers reported a tendency, certainly among private investors, to lock in profits after the long bull, ignoring possible tax bills.
But with the financial year drawing to a close many private investors are inclined to look at their capital gains situation, making the necessary adjustments to their portfolios to make sure they get the pounds 6,300 exemption.
Such activity is good for stockbrokers' bank balances but normally has little impact on the market's level.
More important to its performance is the actions of institutional investors. They indulge in bed and breakfast trades and around this time of year are known to undertake a little portfolio window dressing which often creates distortions.
With such activity occurring under the shadow of what is likely to be a dirty, vitriolic election campaign, the market is clearly set for a difficult time over the next two weeks.
And then the new tax year is likely to start with the market facing more pressures. There is a grave danger the knockabout political confrontations will unsettle foreign investors. If they should take fright, talk of a Footsie correction to 3,800 could be too cautious.
There are also the problems being encountered over the Crest computerised settlement system. Some private client stockbrokers claim it is too slow, forcing staff to remain at their desks late in the evening. The so-called "residual stocks" - those which for one reason or another are not on Crest - will be defined next month. So dealing in out-of-the-way shares may become even more difficult.
Crest argues its performance has improved, with 80 per cent of deals settled on the intended day, similar to the old system.
Alliance and Leicester Building Society could also present difficulties when it arrives next month (dealings are expected to start on 21 April).
With a valuation estimated up to pounds 3bn it will be the largest introduction the market has experienced, providing a serious test for Crest.
The building society, to be followed later this year by the likes of Halifax, Woolwich and Norwich Union, has arranged an intriguing dealing service to smooth its arrival with blue-blooded stockbroker Cazenove.
Its members who wish to sell shares have been offered a free dealing service. If they notify their selling intention by 11 April their shares will be parcelled by Caz and sold by auction; the first occurring on the Friday before dealings start.
Members who use this service will collect the average price obtained through the auctions and any other related Caz sales.
Alliance & Leicester qualifies for Footsie membership, causing yet another adjustment. The composition of the blue-chip index may have to be re-examined once the other mutuals arrive to prevent it being hopelessly distorted by financial shares.
There is a strong flow of profits this week despite the Easter holiday. The building industry takes pride of place with an array of building material, construction and property groups reporting.
Top of the list are Blue Circle Industries, Caradon and Redland. Others reporting include Travis Perkins, Taylor Woodrow, Barratt Developments and Slough Estates.
Their combined results should underline the building revival. BCI is likely to produce an 11 per cent profits gain to pounds 303m and Caradon should show it has overcome its problems with a 16 per cent gain to pounds 175m.
But Redland will not join the Easter parade. The group recently suffered the indignity of losing its Footsie status as its shares, riding at 634p in the winter of 1994, fell to 328.5p. They closed last week at 360.5p.
Overseas influences have hit the group. NatWest Securities' analyst Andy Bell says tile volume across Europe was poor in Redland's last quarter. The group also suffered losses in its French aggregates business and problems in the German housing market.
He predicts a profit fall from pounds 355.1m to pounds 252m with a unchanged 16.7p year's dividend.
There has been talk Redland intends to arrest the decline through a demerger or takeover strike. But any action could be a long way off.
Inchcape, the international trading group, is another on the profits list. It, too, has suffered a sharp share fall, also giving up Footsie membership. The price reached a 630p peak in early 1993; last week it was 255.5p.
Reasons for the decline, say Nigel Utley and Tony Shepard at Greig Middleton, include lack of focus and an uncompetitive product range due the strength of the Japanese yen. "These appear to have been either addressed by the new management team or reversed in the market." The Greig men look for a modest profit recovery, from pounds 146.8m to pounds 158.5m.
The shares of the two laggards are not short of supporters. Mr Bell believes Redland is a buy and Messrs Utley and Shepard take the view Inchcape offers a 75p upside.
Others with results include fashion retailer Next (pounds 160m against pounds 125.3m) and P&O (pounds 290m compared with pounds 320.1m).Reuse content