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EDITIONS
 Friday, 24 January, 2003, 20:10 GMT
Share fall conceals some hope


Here is the stock market news.

Shares in the ITV company Granada gained another 5% on Friday. The chemicals company Johnson Matthey rose 4.5% - up 32.5p.

Aviva, HBOS, Lloyds TSB, and Safeway also put on the pounds for their investors.

The headlines tell us we've just suffered the worst run on the London market in almost 20 years. But underneath, there's a different story.

Most of the companies in the FTSE 100 index actually gained ground on Friday - the day the index itself fell for the 10th day in a row.

Some 56 firms rose; only 44 fell.

Discriminating

It's not much comfort to investors with money in FTSE tracker funds. But it shows the value of careful share selection for discerning investors.

The stock market really is turning on a nickel

The BBC's Declan Curry
Friday's damage was caused by just a handful of companies - and they were unsettled by the currency markets, not the stock market.

Industrial giants like ICI, GlaxoSmithKline and Invensys lost ground because the fall in the value of the dollar against the pound could hit their profits hard.

All three firms have substantial business in the US.

Glaxo ended the day just 4% lower. If it alone had risen by that amount instead of falling, the FTSE 100 would have ended Friday in the black - and broken its losing streak.

Up or down?

The stock market really is turning on a nickel.

And if the week's trading in London had ended at lunchtime - before the US markets opened - the FTSE would have been up on the day too.

It shows the close links between the London stock market and the New York markets - and it shows we should look to New York for the cause and cure of our shares' illness.

The big story isn't the 10 day-long drop on the FTSE 100. It's the latest big fall on the Dow Jones index.

It shows the US market just can't get a decent break. The rise in US shares on Thursday - ending a five day losing streak there - just couldn't be sustained for a second day.

More gloom in the air

There are likely to be many more days of steep falls on the Dow - and experts say we should welcome them.

Dealers say we won't see a long-term recovery in markets on either side of the Atlantic until the Dow loses another substantial chunk of value - bringing it into line with the losses we've already suffered in the UK.

But there's one problem.

Every time the Dow drops 200 points, we usually throw another 70-100 points off the sledge.

Instead of bringing the markets closer together - and closer to recovery - the Dow's decline just sends us lower too.

And it's anyone's guess when this cycle of misery will be broken.


Analysis

IN DEPTH
The Markets: 9:29 UK
FTSE 100 5760.40 -151.7
Dow Jones 11380.99 -119.7
Nasdaq 2243.78 -28.9
FTSE delayed by 15 mins, Dow and Nasdaq by 20 mins
Launch marketwatch
View market data
See also:

24 Jan 03 | Business
23 Jan 03 | Business
23 Jan 03 | Business
23 Jan 03 | Business
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