Just as Wall Street's strength in recent sessions has propped up a London equity market ridden with anxiety about a possible rise in British interest rates, so US influences were partly responsible for a reversal in British stocks yesterday.

Wall Street's opening decline was prompted by a profit warning issued by DuPont, one of the US market's leading companies, which saw the Dow Jones Industrial Average off more than 50 points early in the US trading session. That eroded much of the confidence boost given to London stocks by news that the Bank of England's monetary policy committee (MPC) had decided to leave interest rates on hold. The decision helped stabilise the equity market, only for sentiment to take a dip as US stocks deteriorated. Over the session, the FTSE 100 index moved in a near 100-point arc. At its worst, the index posted a 61.5 decline, while the day's best level was a rise of more than 34 points.

The day's events saw the sequence of six winning performances by the index grind to a halt, with Footsie dropping below the hard-won 6,000 level, ending 39.9 down at 5,969.7.

But the abrupt about-turn in the leaders did not induce a similar reversal in the second-liners where the FTSE 250 racked up its seventh consecutive gain to close 11.3 ahead at 5,633.3, although closing below the session high of 5,638.8.

Once again the small-cap stocks were largely ignored; the FTSE SmallCap index languished throughout the day, closing a net 2.7 off at 2,586.8.

Dealers said the market's U-turn on the MPC decision, which saw an 8.8 loss in the FTSE 100 transformed into a 20-point gain within 30 minutes of the announcement, had attracted a flurry of institutional cash into the market.

But once the initial flush of enthusiasm had worn off, the relentless flow of profit-taking, a feature of the market recently once the front-line index crosses the 6,000 mark, took over.

"In the past it has always been wise to lock in profits above 6,000. Now there are additional pressures affecting sentiment, currencies, earnings downgrades and the Asian crisis, that still looks to be a wise move," said one market-maker.

He said the market remained unconvinced that the June increase in interest rates to 7.5 per cent was the last in the current cycle, although one more increase in the short term could well prove to be so. Short sterling futures rose sharply yesterday, indicating reduced nervousness about a rate rise.

Despite the SmallCap's latest muted showing, there was a handful of exceptional performers among the market's smaller stocks, notably Creative Publishing, which leapt 57 1/2p to 227p after attracting an agreed bid from Hallmark of the US. And retailer Brown & Jackson produced a bullish trading statement.

There were more profit warnings in the sector, however, with Airflow, Streamlines, Critchley and Telspec all severely damaged.

One of the main FTSE 250 winners was Somerfield, which announced increased annual profits and said it would create 5,000 jobs. The supermarket group gained 33p to 426p as it disclosed that the move was part of a £1 billion investment programme which also involved the conversion of stores bought after the takeover of Kwik Save.

In the light of its impressive results, analysts believed that Somerfield must be taking market share from J Sainsbury, which was labelled a sell by several broking houses. Sainsbury cooled 18 1/2p to 530p.

A reversal of last month's profit-taking boosted the London shares in IT group Micro Focus to 500p, up 42 1/2p. This gave further courage to second-line shares. Elsewhere, the continuing strength of sterling was bad news for exporters.

Turnover at 6 p.m. reached 931.1 million shares, of which 50 per cent was in non-Footsie stocks.