There was no let up yesterday in the extreme volatility that has gripped London's equity market in recent weeks.
An early attempt by the FTSE 100 to extend Tuesday's powerful performance and hold above the 4,200 level ran out of steam within an hour of the opening and was soon replaced with a modest decline.
That, too, proved short-lived, and the index then spent much of the rest of the day dipping in and out of red before falling away in the late afternoon as Wall Street came rattling back after an early upsurge.
While the 100 index was undecided throughout the day, the second- and third-ranking stocks enjoyed excellent gains, catching up after their underperformance on Tuesday.
After pushing back through the 4,200 level the FTSE 100 fell away to a low of 4,069.0, before closing a net 36.6 off at 4,094.4.
The market's early strength stemmed mainly from Wall Street's strong overnight performance, its third straight three-figure gain, and reassuring quarterly results from Cisco, the internet equipment manufacturer.
The prospect of a cut in US interest rates in the near future continued to inspire transatlantic markets. The US Federal Reserve's rate-setting open market committee meets on Tuesday and there is a growing view that a reduction of at least 25 basis points is on the cards.
And a long list of company reports and news items was seen mostly as market-friendly, especially interim figures from Standard Chartered, whose shares topped the Footsie's winners list.
The publication of the Bank of England's Quarterly Inflation Report coincided with the market's mid-morning decline, but was not generally viewed as bearish for the stock market.
Mr Mervyn King, deputy governor of the Bank of England, said the bank "stands ready to take whatever action is necessary, in either direction, to meet the inflation target".
"As such, if we see further equity market weakness and some soft data releases, the bank is indicating it will be prepared to cut rates," said the economics team at ING Financial Markets.
Turnover in equities was 2.1 billion shares, much lower than Tuesday's 2.56 billion. - (Financial Times Service)
