Barclays, the banking group reporting today, drew the short straw. The shares fell 10p to 502p, helping to drag the rest of the sector lower.
A sell programme was also apparent. Barclays is expected to produce profits of pounds 800m and hold its dividend at 15.15p.
The rights rumours reached their peak just after lunch with one securities house keen to sell stock.
However, many felt a rights move, no matter how desirable, was unlikely so soon after the arrival of chief executive Martin Taylor, former chief executive of Courtaulds Textiles.
Enterprise Oil, another reporting today, held at 420p. Some fear a dividend cut, although if rights rumours are correct the payment could be increased.
A lacklustre session was also dominated by uncertainty over interest rates. A rush of generally encouraging profit announcements had little impact.
A marginal German interest rate cut did create an early flutter of optimism, but a more cautious attitude quickly took hold and, with New York subdued, the FT- SE 100 index ended 17.7 points lower at 3,246.7.
The day's performance appeared to support the growing conviction that shares are, despite occasional volatility, likely to mark time in the next few months. In the past four trading days, despite sharp movements, the 100 index has managed to move just 0.2 points.
Although most strategists are still looking for a higher year-end 100 index, they expect the second six months to produce a stronger performance than the first half.
Bonds, which have dominated equity trading as derivative worries mushroomed, were quiet with government stocks little changed. The hedge funds scare, with attendant talk of huge losses at some investment houses, seems to have subsided.
'After last week's hysteria hedge funds have barely warranted a mention this week. Rumoured rights issues are the new depressant,' said one trader.
Two modest rights issues did appear - from the Guinness Peat financial group and JD Wetherspoon, the pubs chain.
The quarterly review of the 100 index produced the expected changes. Out go Schroders, the securities group, Scottish Hydro- Electric and Anglian Water. As if resigned to their fates, Schroders fell 45p to 1,063p, Scottish 6p to 367p and Anglian 8p to 507p.
The newcomers had already enjoyed their 100 index run and on a dull day joined the retreat. De La Rue, the printing group, fell 6p to 984p, Tarmac 1.5p to 203p and NFC, the old National Freight Corporation, 2p to 262p.
Forte was at one time 5p higher at 273p as rumours swirled again that it planned to buy the French Meridien hotel chain. The shares closed at 270p. Euro Disney put on 15p to 405p on hopes that a refinancing package had been agreed.
First Leisure shaded to 319p ahead of an analysts' meeting.
BAT, with figures ahead of expectations, gained 15p to 485p. Cadbury Schweppes scored an early gain on its results but ended unchanged at 494p. Standard Chartered, following in-line profits and a share split, was another to lose an initial gain, ending 37p down at 1,143p. Bluebird Toys jumped 90p to 833p on better- than-expected profits.
Telephone shares gave ground as Hutchisons launched its Orange mobile phone service. Vodafone fell 12p to 594p.
United Biscuits continued to suffer from worries about the performance of its US operations, falling further to 335p, down 3.5p.
The takeover flurry over Boddington settled down, with the shares 1p higher at 295p. Dividend buying, as well as the Whitbread stake, has created the ferment.
British Land fell 7p to 407p. Its placing of pounds 150m convertible bonds through Swiss Bank Corporation did not appear to go smoothly, with talk of a grey market price of pounds 97 against the pounds 100 issue price.
Next, the retailer, enjoyed a Goldman Sachs push, up 3p to 219p, and Fisons rose 2p to 132p as London Wall Equities said buy, predicting profits of pounds 105m this year compared with pounds 1m last year.
Johnson Matthey, the metals group, fell 7p to 557p following the surprise departure of Richard Wakeling, chief executive. Williams Holdings remained in demand, up 4p to 413p. TI Group, figures today, rose 8p to 434p as the merger of its Dowty aircraft landing gear operation with the Messier group won French government approval.
Best performer was James Dickie, an engineer. An upbeat trading statement and the promise of an interim dividend, first since 1990, lifted the shares 47p to 150p.
Ladbroke's hopes of returning to the casino business have put the spotlight on Stakis, the revamped leisure group that at one time made no secret of its desire to sell its casino chain. Without a realistic bid Stakis changed its mind, and the resultant cash flow helped its new management to reshape around hotels and, reluctantly, casinos. Stakis held at 88p.
Enviromed, the biotech and healthcare group, could have laid the foundation for a quoted US offshoot. Its planned 12.5 per cent stake in Selfcare could lead to closer links. Some believe Enviromed will increase its shareholding and Selfcare will seek a US listing. Enviromed, suspended at 132p for a pounds 9.8m cash call, has established links with a quoted Canadian group.
The FT-SE 100 index closed 17.7 points lower at 3,246.7 and the FT-SE 250 index lost 10.1 to 3,913. Turnover was 730.2 million shares with 31,485 deals. The account ends on Friday, with settlement on 21 March.Reuse content