Early hopes that the FTSE 100 Index could end the month clear of the 4200 level had evaporated by the time trading closed today – more than 66 points off its morning high.
A lacklustre start on Wall Street, where traders are preparing for the holiday weekend in the United States, did little to help shares in London, where an early morning rally had already run out of steam.
Despite putting on nearly 30 points in the opening minutes of trading, taking it clear of the 4200 mark, drawing comfort from a late recovery on Wall Street last night, the Footsie ended the day 36.9 points lower at 4161.1.
Financial stocks had a tough session led by insurer Royal & Sun Alliance, after rumours that it could launch a rights issue wth its half year results next week. Shares lost 4%, or 5.75p, to close at 138.5p.
But the financial sector as a whole was weak with rival insurers Aviva and Legal & General off 5.5p and 0.5p at 501.5p and 99.5p respectively.
Meanwhile, among banks, Royal Bank of Scotland slipped 10p to 1574p, Barclays was off 6p at 460p and Abbey National was 5.75p lower at 527p.
But it was a better day for pubs operator Mitchells & Butlers, which jumped 5% or 11p to 252p after it pulled out of the auction for the Scottish & Newcastle estate.
Meanwhile, former stable mate Intercontinental Hotels, which lost ground yesterday after gloomy results from rival Hilton, was down 11.5p at 489p.
National Grid Transco was being closely watched following the power cuts which brought London to a standstill last night.
However, there was relatively little impact on the stock, which fell 6.75p to 387.25p, a drop of 2%.
On an upbeat note, pest control-to-tropical plants group Rentokil Initial, which reported half year results yesterday, put on almost 3% or 5.5p to close at 210p.
But supermarket group Sainsbury’s was having a bad day, down 6.25p at 275.75p after rival Tesco – up 3p at 216p – announced £60 million of price cuts.
Outside the Footsie, media stocks benefited from a rush of buying interest with radio group GWR up 21p at 233.5p, Capital Radio ahead 27.5p at 557.5p and Chrysalis 5.5p stronger at 205.5p.
Those heading in the opposite direction included electronics group Psion, which fell 3.75p to 78.25p despite announcing narrower half-year losses of £11 million.
Investors appeared more concerned with the company’s plan to increase its stake in mobile phone software firm Symbian from 25% to 31%.
And a profits warning from CCTV group Photo-Scan sent shares down 14%, or 15.5p, to 93.5p.
Tech company Morse lost hold of an earlier gain to close down 1p at 142.5p, after announcing full-year losses of £14.1 million.
The biggest risers were Mitchells & Butlers, up 11p at 252p, Johnson Matthey up 31.5p at 981.5p, Rentokil Initial up 5.5p at 210p and Reckitt Benckiser up 22p at 1190p.
The biggest fallers were AstraZeneca down 106p at 2430p, Royal & Sun Alliance down 5.75p at 138.5p, Reuters off 7p at 247.5p and Gallaher down 15p at 557p.