AN uneasy calm settled over British stocks for much of yesterday, with the big institutions stubbornly refusing to get too involved in either buying or selling ahead of the next crucial economic news, the US non farm payroll report for March, expected later today.

But London could not ignore the wearying effects of the latest retreat by US stocks overnight, which saw the Dow Jones Industrial Average post another three figure fall before finishing 94 points lower.

And there was more of the same at the outset of trading in the US yesterday when the Dow kicked in with a poor opening.

There was more than an element of unease in European markets, as the Dow dropped more than 80 points not long after US trading had begun, before stabilising and showing a 50 point retreat an hour after London closed.

Prior to the latest US excitement there was plenty of news for the market to get its teeth into, including the Labour Party's manifesto. There were no real surprises for the market in the detail of the document, especially the absence of any details of the much feared windfall profits tax on the utilities, whose shares have been underperforming for some time. But, as some dealers pointed out, the Conservative Party's manifesto, published on Wednesday, hardly got a mention during Wednesday's trading session.

The Confederation of British Industry's March survey which indicated a slower than forecast rise in high street sales, gave a minor lift to gilts.

At the close of another tense trading session the FTSE 100 was left with a 22.0 decline at 4,214.6, not far short of the day's low, 4,233.2, reached over lunchtime.

There was much less pain for the market's second liners and smaller stocks, where the FTSE Mid 250 settled 2.7 lower at 4,504.6 and the SmallCap index 4.6 down at 2,279.9.

The FTSE 100 has now fallen 98.3 over the past three sessions, wiping out its post US rate rise gains.

Unlike earlier in the week London market makers were more relaxed with the market at the close yesterday.