National Westminster, down 15p at 491p, was tarred with the rights issue brush. Most observers were sceptical. But with profits depressed for the past four years it was not difficult to present a realistic case for a funding exercise.
NatWest last tapped shareholders in 1986, when it pulled in more than pounds 700m.
The sudden display of banking disenchantment was helped by cautious comments from Yamaichi, the Japanese securities house, and, it is thought, Smith New Court.
The interim banking season is due to start at the end of this month when Lloyds Bank reports its results. In the following four weeks the other 'big five' offer their contributions.
Yamaichi's Ian Poulter does not expect a rash of banking rights, and NatWest is not his favourite to call on shareholders. He says: 'Those banks which might welcome new cash are the ones which have not served shareholders particularly well in terms of dividend growth, such as Barclays.'
Mr Poulter suggests that Barclays, down 14p at 478p, is a sell and profits should be taken in HSBC, the Hongkong & Shanghai Banking Corporation, off 18p at 631p.
Bank shares, he suggests, already reflect the expected profits recovery and the results will offer 'scope for disappointment'.
Yamaichi forecast Barclays making interim profits of pounds 190m and NatWest pounds 230m.
Royal Bank of Scotland, due to report year's results in November, is another Yamaichi sell. The shares fell 7p to 298p.
The rest of the market showed no inclination to build on the expected relief over the BT3 success. The FT- SE 100 index ended 19 points lower at 2,823.9 with volume topping 600 million shares.
Two less-than-impressive statements - from Argyll and Courtaulds - and heavy US selling of the Footsie September futures contract did most of the damage.
BT partly-paid ended 0.5p higher at 168.5p, with the old shares unchanged at 413.5p. Trading was again active, although well below Monday's levels. Seaq put volume of the two stocks at 62 million.
BOC, the chemicals group, bucked the downward trend thanks to a buy recommendation from Martin Evans of Hoare Govett. The shares edged ahead 6p to 655p. Hoare also knocked Laporte 17p to 578p by cutting its forecasts from pounds 114m to pounds 100m and from pounds 127m to pounds 110m.
Reckitt & Colman failed to hold an early gain, ending 2p lower at 550p. John Marshall at Carr Kitcat & Aitken believes profits should start to advance this year after recent sluggishness. He is looking for pounds 280m and then pounds 310m for next year.
Blue Circle Industries slipped 2p to 245p as fund management group Mercury Asset Management dribbled out 100,000 shares. MAM now has 14.97 per cent, down from 17.97 per cent. But MAM lifted its holding in RMC by 50,000 to 20.01 per cent. The shares slipped 4p to 775p.
Increased US holdings failed to inspire Danka Business Systems and Vodafone. Danka dipped 11p to 214p as ADR interest went to 46.5 per cent and Vodafone shaded 4p to 443p, with its ADR holding reaching 23.03 per cent.
Medeva and Tiphook continued to feel the weight of disillusioned selling. In busy trading Medeva lost 6.5p to 110.5p and Tiphook 17p to 213p.
More price cuts by Philip Morris, the US drink, food and tobacco giant, caused anxiety. Cadbury Schweppes lost 11p to 433p, Unilever 17p to 949p and United Biscuits, where Cadbury bid hopes have faded, 7p to 360p. BAT Industries recovered to end little changed at 430p.
Drug shares firmed, with the US house Wertheim Schroder apparently taking a more positive view than many of its rivals. But Zeneca remained in the doldrums, falling 9p to 604p, just above the pounds 1.3bn rights issue price.
The rally by food retailers came to an abrupt end following the Argyll statement at its yearly meeting. Argyll, the Safeway chain, fell 11p to 302p. J Sainsbury lost 8p to 450p.
Barclays de Zoete Wedd lowered its Argyll forecasts by pounds 5m to pounds 450m and pounds 15m to pounds 490m.
Utilities made headway on yield consideratons. Ten of the 12 regional electricity shares went ex-dividend on Monday.
British Aerospace fell 18p to 400p as the market was assailed by new doubts about the Taiwan joint venture.
Stakis, the rapidly recovering leisure group, improved 3p to 55p. Ahead of analysts meeting the group today, Hoare Govett suggested a switch out of Forte, down 5p at 224p.
Greycoat, the struggling property group, held at 20.5p. There are lingering hopes that the terms for the preference shares in the proposed Postel-led restructuring will be improved. They edged ahead 0.5p to 40.5p.
UK Land, down from 30p to 4p on Monday, staged something of a recovery, doubling to 8p.
Shares fell back, with the FT-SE 100 index down 19 points at 2,823.9 and the FT-SE 250 6.3 points adrift at 3,205. Turnover was 604.7 million shares with 28,067 bargains. The account ends on 30 July, with settlement on 9 August. Government stocks were quiet.
International Business Communications, a conference organiser and newsletter publisher that seemed in danger of collapsing under its debt burden, soared from 12.5p to 118p. But the upsurge was an illusion. It reflected a 10-for-one share consolidation that should have left the price at 125p. The group has been reorganised and stockbroker Williams de Broe expects profits of pounds 3.45m this year.
Quadramatic, the engineering group created by former FKI men Tony Gartland and Jeff Whalley, achieved a modest premium. Placed by stockbroker Granville Davies at 123p, the shares closed at 128p. Quadramatic makes coin handling equipment and plastic optical products. It is expected that the Gartland-Whalley team will attempt vigorous expansion through takeovers.Reuse content