City traders in London were hoping the Stock Market would continue its resurgence today after the benchmark FTSE 100 Index finished ahead yesterday for the first time in six sessions.
Yesterday’s rise gave investors some respite from the downward trends which have seen the London market fall to its lowest point for seven years, dogged by uncertainty and fears that the Iraq crisis will develop into full-blown war.
The Footsie closed up 16.7 points at 3452.7 after taking a lead from gains on Wall Street where the Dow Jones Industrial Average staged a limited comeback.
But the blue chip index stayed below the psychologically important level of 3465.1 points, or 50% below its peak of 6930.2 achieved on December 31, 1999.
Britain’s manufacturers were given a lift earlier in the day when figures from the Office of National Statistics said a strong performance from the computer industry had helped boost the sector in January.
Stock markets have been battling against uncertainty as the prospect of war grows increasingly likely.
Analysts remained unmoved by yesterday’s gains and many potential buyers of shares are expected to remain sitting on the sidelines until the situation with Iraq becomes clearer.
Dealers do not doubt a US-led war on Iraq will be launched but the timing and the extent of the divisions among Western governments remain an issue and are poised to push up oil prices as well as hit share prices.
The world’s major oil producing countries yesterday decided to keep production quotas at current levels and pledged to keep supplies flowing in the event of disruption caused by war.
Representatives of the Organisation of Petroleum Exporting Countries (Opec) met in Vienna and dismissed suggestions they should boost production now to reassure investors ahead of the expected conflict.
Despite sharply higher oil prices, which hit fresh two-year lows on Monday, Opec members argued that the world had enough crude to meet demand.