Nine years on from Black Monday analysts are divided on the forecast; STOCK MARKET WEEK

Nine years ago the stock market was in hideous retreat and Britain had, much to the astonishment of weatherman Michael Fish, been ravaged by hurricanes.

Black Monday was probably the worst day the market had ever experienced. Footsie, in alarmingly chaotic trading, crashed almost 250 points and suffered a three-week battering which took it down 736.7 points to 1,565.2.

As investors stampeded to sell, fortunes were lost, bankruptcies boomed and the market was a raw, jagged, frightened place.

The dramatic change in sentiment caused much of the damage. Shares had been riding at a peak shortly before danger signals started to appear in New York and the collapse, aided and abetted by the shutdown caused by the storm, smashed a market which quickly became utterly demoralised.

But any investor who followed the adage "buy when the rest of the world is selling" could, by now, be sitting pretty.

Last week Footsie ended at 4,053.1, yet another high. And there are even voices saying there is too much caution around and the surprising autumnal surge will continue.

Robin Griffiths, a highly regarded chartist at HSBC James Capel, is one. Chartists have an uneven reputation. They were once described by Jim Slater, when he was a high-flying City financier and not an investment guru, as men in ragged raincoats with big bank overdrafts.

But they sometimes get it right. So Mr Griffiths' Footsie target of around 4,400 before next year's election should be taken seriously.

Conventional strategists are generally much more subdued. Richard Jeffrey at Charterhouse Tilney says the market's strength lacks conviction and frets about the spectre of inflation. He believes that if the Chancellor does not raise interest rates following next week's monthly meeting with the Bank of England's Governor, Eddie George, then cuts taxes in the November Budget, "gilts could take fright".

He says: "With equities no longer looking so attractive on an earnings yield basis, any appreciable increase in gilt yields would be likely to trigger a set-back in Footsie.

"An indication of the market's vulnerability to bad news is provided by the substantial outperformance by Footsie over the rest of the market in recent months."

Ian Williams of Panmure Gordon believes shares have "begun to look rather tired and with little obvious good news on the horizon further progress will become more of a struggle".

Jeffrey M Weingarten and Simon Ferguson at Goldman Sachs reckon the market is fully valued and see Footsie at 3,950 points a year ahead. Mark Brown at ABN Amro Hoare Govett is another cautious soul - 3,700 at the year- end and much the same in June.

Many of the top investment houses are inclined to concentrate their endeavours on the blue-chip Footsie index. The case for smaller companies, the 250 FTSE MidCap constituents and the rest, is much less researched. Capel- Cure Myers, however, believes the second liners could outperform their peers next year.

Smaller companies are highly sensitive to domestic growth, exchange rates and interest rates. Growth should continue and any expected sterling appreciation should be less harmful to smaller operations. But the second liners are heavy casualties of higher interest rates. They will be lifted next year, although any move is unlikely until after the election.

The divergence of forecasts about the future performance of shares is only to be expected. Many views, of course, make a market. Even "big bang", 10 years old next weekend, has not, despite many of the fears at the time, made any difference to such a fundamental tenet.

The City is once again enjoying the nostalgia of "big bang" anniversary parties. It is still convincingly argued that if the old-style trading floor, with its eyeball-to-eyeball dealing and clear distinction of jobbers and brokers, had existed a year later Black Monday, and the subsequent slide, would not have been so traumatic.

The switch to screen trading did, however, dramatically change the market's character. And it devastated the area immediately around Throgmorton Street as the necessity evaporated for being near the old trading floor.

Once the Throgmorton Restaurant, known to most as the Long Room, was the market's central meeting place. Dealers would scramble from the nearby stock market floor into the basement collection of restaurants and bars which constitute the Throgmorton.

But screens, faxes and other additions to modern-day dealing have encouraged firms to spread far and wide, leaving Throgmorton Street and the surrounding alleys and passageways looking deserted by the standard of only 10 years ago.

It is, perhaps, unfortunate that a week which starts and ends with a birthday should offer such a thin programme of company profits.

Third-quarter figures from Imperial Chemical Industries, once the bellwether of the country's industrial health, are due on Thursday. ICI is no longer regarded as a measurement of the nation's well-being. Industry has changed and ICI has shed many activities, including the high-flying Zeneca drugs group, which has soared since the demerger.

It is just as well the group's importance as a significant indicator has faded. The nine-month figures will be depressing with Lucas Herrmann at NatWest Securities expecting pounds 495m, down from pounds 758m.

The only other heavyweight which has indicated results this week is Wolseley, the building materials supplier. NatWest believes it, too, will offer a subdued display. Year's out-turn is forecast to be some 2 per cent down at pounds 241m. Analysts Robert Donald and John Messenger fret about its big US exposure. The company earns up to 45 per cent of its profits in America and NatWest feels that unless European operations are sharply increased through an acquisition "the risk of a slowdown in the US will lead to some noticeable underperformance in the stock relative to the wider equity market".