Electronic buy programmes and old-fashioned cherry-picking triggered hefty rises across the board until early afternoon. But just when traders were starting to enjoy the top of the bounce of their bungee-jump, dangling peacefully in the air, they cast their eyes across the ocean and were little pleased with what they saw.
For the second day running the Dow was twisting and turning with precious little lack of direction. New York's tremors quickly spread to London, and Footsie and company were taken for another downward ride which halved their previous gains. In the end, the blue-chip index finished 66.7 points higher at 5,235.8, after having risen as much as 172 points. The medium cap ended up 84.7 points at 4,712.0, while the small cap rose 33.9 points to 2,081.3. The feeling is that the roller-coaster is here to stay, with the London market set to mirror the gyrations of its US counterpart for a good few weeks.
IT stocks were in evidence, fighting back with vigour after Tuesday's sharp losses. Misys was the leader of the pack, putting on 198p to 2,502p as analysts pointed out that the sell-off had gone too far. ARM Holdings, up 140p to 1,105p, and Sema, up 66p to 581p, topped a FTSE 250 risers' chart which bore an uncanny resemblance to Tuesday' fallers table. The two stocks have now recouped most of the losses suffered two days ago.
CMG, the Anglo-Dutch computer software firm, soared 187.5p to 1,862.5p after reporting a 60 per cent leap in profits and encouraging advances in market share. But the IT dominance in the upper echelons of the mid cap index was spoilt by the presence of Bodycote: the engineer rose 97.5p to 942.5p in late trading on the back of a few deals between 937p and 940p.
Fellow engineer Siebe was also in blue, with shares putting on 6 per cent to 222.75p, helped by the pounds 136m disposal of a subsidiary and by a Panmure buy note. Smith Industries completed the engineers' hat-trick, rising 30.5p to 671p after a positive trading statement. Johnson Matthey let the side down: the metallurgic engineer was down 18.5p to 355.5p on concerns over the market for semi-conductors.
Fears of an expulsion from the FTSE 100 returned to haunt Rank. Shares in the leisure group topped the Footsie fallers after shedding 15.25p to 258p. On the other side of the board, Granada Group benefited from bottom-fishing. The media-to-hotels conglomerate soared 10.5 per cent to 778p as the market realised it was trading at a nearly two-year low. Granada was denied the biggest riser spot in the Footsie by Billiton: the mining giant dug up a 15.4 per cent rise to 114p as Dresdner Kleinwort Benson said "buy" ahead of Monday's results.
A profit warning by Maiden, the outdoor advertising group, soured the day for media stocks. The posters' group itself took a massive tumble, with the shares halving to 212.5p. And its bearish comments on the advertising market sparked a collapse at EMAP, the magazine publisher. Shares in the paper giant fell 7 per cent to 940p, helped on their way by rumours of a 100,000-share sell overhanging the market.
Capital Radio was also out of tune, losing 16p to 574p amid concerns that airwaves advertisers are getting cold feet. Telecoms had a mixed day: Cable & Wireless rang a 25.5p rise after signing an IT outsourcing deal with IBM.
Orange's future, however, did not look that bright: the mobile phone group plunged 28p to 584.5p after the Hong Kong giant, Hutchison Whampoa, denied rumours that it was about to sell its stake.
On a happier note, Matalan and Monsoon, the two retailers which came to the market at roughly the same time, enjoyed a buying spree. Matalan, the chain of out-of-town outlets, closed 26p higher to 246p after a good set of interims. Monsoon, the trendy retailer of women's frocks with an ethnic feel, rose 10p to 112p as a leap in pre-tax profit overshadowed a less-than-flattering like-for-like sales update.
Hickson, the chemical group, was a star among the minnows, with a glowing set of results sending the shares up 24 per cent to 48.5p.
Brit Allcroft found the rights to Thomas the Tank Engine a bit of a gravy train: the shares steamed ahead 40p to 238.5p after a rise in pre-tax profits and intriguing predictions of a Thomas theme park. There was no such luck for Hampden: the Irish retail group suffered a fall in interim earnings which sent the shares spiralling down. They closed almost 24 per cent off to 57.5p.
Parallel Pictures, the film production company which is preparing a film starring Robert "Full Monty" Carlyle, laid it all bare on its debut on AIM: the shares fell 3.5p to 28.5p.
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