Dealers were perplexed at the London market's reluctance to respond to Wall Street's bullish return from the long US holiday weekend. The FTSE 100 index ended a disappointing 2.8 lower at 5,344.2, having moved erratically throughout the session. At best, shortly after Wall Street opened, it was 52.8 ahead; at worst, in midmorning, it was down 33.1.

However, good support emerged for the second-liners, represented by the FTSE 250 index, which posted a 57.4 gain at 4,804.5 and the FTSE SmallCap, up 17.3 at 2,102.2.

Wall Street's response to the big gains in global markets, in the wake of Mr Alan Greenspan's comments on the outlook for US interest rates after the Asian/Russian crises, saw the Dow Jones Industrial Average surge 300 points in quick time.

But some of the heat in the US stock market faded. The Dow relinquished almost 100 points of its early gain. Old hands in London said Wall Street's surge had been expected and mostly accounted for during Monday's 180-point surge in the FTSE 100 index, the second-biggest points gain on record.

And they insisted the turbulence in global markets, which has seen Wall Street and most of the big European markets retreat almost 20 per cent from their all-time highs, was by no means over in the short term.

Footsie never looked convincing yesterday, kicking off in tentative fashion despite good performances by Hong Kong and Tokyo, both of which moved up around 1 per cent.

Those gains were wiped out within an hour.