New York, demonstrating its power as the world's biggest market, did the damage. On New Year's Eve it crashed 101.1 points and remained in ragged retreat while London was open yesterday.
After a merry festive run, achieved on low trading turnover, it could be argued the market was ripe for a correction and a little old-fashioned profit-taking.
Even so the brave souls forecasting a rip-roaring year have had an uncomfortable time as what was only a relatively modest weakness on Wall Street drew attention to London's fragility.
Many believe the first few months set the pattern for the rest of the year. Although such a philosophy is often too simplistic the importance of sentiment is frequently overlooked by forecasters and there is little doubt that 1997's opening, if modest, hiccup has at least touched the foundation on which many an optimistic forecast was built.
Over the holiday season such brutal fundamentals as higher interest rates, sterling's strength and the uncertainty of the general election were largely ignored. The market seemed content to dwell on the deluge of new year share tips and allow a little window-dressing by fund managers to influence its direction.
Only six Footsie stocks managed to make progress. Best of the bunch the pedestrian National Grid which managed a 2p gain to 197.5p. The appearance of such a dull stock in pole position seemed to sum up the lacklustre state of the market. Biocompatibles International was the undisputed leader of the FTSE 250 index. The healthcare group, which has moved ahead strongly over the holiday season, bounced another 45p to 865p. ML Laboratories, which has experienced a ragged run since hitting 468.5p in February, managed to stir itself into a 7p gain to 210.5p.
In the bleak conditions some of the third-liners enjoyed intriguing runs. Lanica Trust, the Andrew Regan vehicle, started 1997 as it had finished last year - in rampant form. The shares surged 212.5p to 1,875p, yet another peak.
The company's spectacular progress has been achieved against a background of little information. It has done a mail order deal with the NAAFI and is set, so the rumour mill proclaims, to link with Littlewoods on the mail order front. In the meantime it is looking increasingly hard to justify a surge from 58p since Mr Regan, who had limited success with his earlier involvement, Hobsons, arrived in the autumn.
Shoprite, once a discount food retailer, was another attracting attention. The shares improved 3.25p to 24p. The market has for long suspected the group, shattered by the distressed sale of its once high-flying food chain, was preparing for a comeback.
It has indulged in a buy-back of preference shares and last month returned to the black with a half-year profit of pounds 958,000. The group still has car dealerships and retail and property interest on the Isle of Man. With gearing down to 48 per cent it could, some suspect, be preparing the ground for an ambitious strike.
Capital Shopping shaded 2p to 364p. There is persistent market speculation it plans to swoop on Imry, the property arm of Barclays, the banking group. The company raised pounds 203m through a rights issue in November and the market suspects the cash call was to provide ammunition for the Imry deal.
Barclays would also most certainly require a large cash element in any Imry sale and Capital should be in a position to provide sufficient cash to promote the take over. The year's first newcomer, Sanctuary Music, fell victim to the low key atmosphere, managing a downbeat 65.5p from its 65p placing.
SDX, a business communications group, however, shrugged off the new year gloom gaining 13p to 188.5p. It was floated last month at 160p.
Northern Leisure, a discotheque group, topped 200p before settling at 199.5p, up 7.5p. The shares have been strong following a Collins Stewart suggestion the shares could double in the next three years.
The stockbroker said profits this year could hit pounds 8m (pounds 5.5m) and then move to pounds 10.9m.
It suggests Northern is getting to the size "whereby it represents an attractive acquisition target for a larger leisure company".
Premiere, running employment agencies, is set to double profits, believes researcher Hardman & Co. It expects last year's profits to come out at pounds 783,000 and then move to nearly pounds 1.5m in 1998. Since coming to market at 133p in the summer Premiere has made one significant acquisition. At 137.5p Hardman suggests the shares are on the lowest prospective rating of any quoted recruitment group.
Newarthill, the Ofex traded group which owns building contractor Sir Robert McAlpine, plans to spend pounds 6m buying in 11.6 per cent of its capital at 400p a share and then bid 400p for the remaining capital. The buy-in involves the McAlpine family and an unidentified dealer. The bid for other shares is expected in March. The shares jumped 155p to 400p.Reuse content