Gordon Brown’s declaration that he would not “follow the indicator oftheday” in trying to square the demands of consumers and exporters dealta blow toany optimism that investors might have felt today after yesterday’srise.
In an interview with The Times, the Chancellor ruled out an AutumnBudget andfurther tax rises on consumers to cool down the pound. He insisted that what exporters really wanted was an end to “theinstabilityof stop-go, the return to boom-bust”.
But what investors really wanted in early trading was to get out ofstocksthey had bought with enthusiasm yesterday, as the pound headed backover thethree-mark level once again.
In volatile trading, the index of 100 leading shares was down 3.9 to4923.4soon after the market opened.
Predictably, a flight back to stocks with more domestic exposurehelpedretailers. Dixons gained 8p to 603p, Next added 4p to 741p, Marks & Spencer rose4p to580p and B&Q owner Kingfisher was up 5p to 707p.
Several FTSE 100 companies reported interim figures today, but werenotexactly rapturously received by the market. Low profits growth and a lack of news on the MCI merger meant that BTwas asell, as its shares lost 6p to 425p. Glaxo’s announcement that sterling and the expiry of the patent onZantac, itsanti-ulcer drug cost it £34m also failed to impress, as itlost 14p to£13.16.
EGi News 01/08/97
