A rally late last week was led by the large telecom and oil stocks, although Vodafone's recent steep decline is still weighing heavily on the index. Technology stocks continue to take a battering and the recent elevation of some of the sectors key players to the FTSE100 Index has proved short-lived. In March, technology stocks entered the index, pushing aside some of the more established players. Since then the share price of companies such as Baltimore, Celltech, Psion and Kingston Communications have fallen by more than a half. The index is being re-jigged next month.
Chance is they are back out as some of the old favourites go back in.
There is a message there somewhere. Last week the latest Bank of England inflationary report made comforting noises about UK price pressures and led some analysts to comment that the top of the UK interest rate cycle may be close. The markets, however, remain uninspired and broker year-end forecasts are rapidly dropping towards 6,500. At the moment dealing in the market is like walking through mud. The decision is a further development within a sector undergoing profound consolidation and puts intense pressure upon the management of Standard Life, who are fighting to maintain independence in advance of a vote by members on June 27th.