Gloom in London

Press, 2 June 1984, Page 21

Gloom in London

NZPA-AAP London A London stock market slump has been blamed on a combination of poor British trade figures, the Gulf war, and the miners’ strike. According to the “Financial Times” there is also continuing fear about interest rate rises and the slow down in economic growth. “It was desperate,” a broker said on Thursday. "It’s all round gloom and doom.” About £4600 million (SNZ9B9OM) was wiped off the value of London shares on Wednesday when the “Financial Times” allordinaries index plunged 22.4 points to close at 803.4. It was the second largest daily fall on record.

The only new element was Tuesday’s announcement of a record British trade deficit in April — £B3BM (about $NZ180IM) — up £6IIM (about JNZI3I3M) on March. The “Financial Times” said this underlined the vulnerability of the economy to the miners’ strike, now in its twelfth week, and to the Gulf war. Investors continue to be concerned about possible rises in interest rates and the slowing of economic growth. These factors, with rumours about the health of the American banking system, were largely to blame for steady losses over the last three weeks. On Tuesday the NewYork market declined to a

15-month low which further dampened buying, although Wall Street rallied late on Wednesday on the strength of rumours of an oil price drop after looking set for a further plunge. Analysts said they would be watching London trading closely to see if there were signs that it would follow the Wall Streeters or slip further. Reuter reported that on Thursday shares moved lower at mid-session, relinquishing opening gains on lack of follow-through interest, according to dealers. Worries about a possible rise in interest rates, the record April trade deficit in Britain and the British miners’ strike continued to overshadow the market, the dealers said.