Late recovery illusory and largely insignificant

UK stocks painted an increasingly surreal picture yesterday as the index closed up in one sense, but down in every other.

The Footsie's last-minute recovery to close 29.6 up at 6,365.3 was little more than a bounce that was both illusory and insignificant.

It was backed by lower than normal turnover of just over 1.2 billion shares on a day when dealers were hanging around for the plethora of economic data due this week from the US and UK.

Footsie fell steadily throughout the morning as it responded to a heavy slide by the technology-weighted Nasdaq late on Friday. At its worst, it was off 60 at 6,274.9, a shade below a level which chart analysts see as critical short-term support. While the support held, the shift increased worries that a break-out from one of the longest chart patterns in recent stock market history might be postponed.

Strategists said the trend of declining peaks and rising troughs was maintained but only just. And they were concentrating increasingly on 6,160 as the next front rather than 6,500, the hurdle that Footsie was testing just a couple of weeks ago.

Recent weakness has been no more than a reflection of a fall in Vodafone - now renamed Vodafone Group rather than AirTouch but yesterday the position was reversed.

Footsie was genuinely lower, with falls across the board in telecommunications, pharmaceuticals and media stocks. There were disappointing figures from Thus, a reversal of last week's trend in the drug stocks and the UK's biggest ever rights issue from Pearson.

A recovery by the Dow Jones Industrial Average and Nasdaq in the afternoon eased the situation. However, it was only in the closing minutes of dealing, when the balancing auction system worked through, that Vodafone suddenly blipped up to close 14 higher and add 40 points to the Footsie. Without that rise, the index was off 11.

Nevertheless, investors still want to be reassured about an increasingly important array of figures that begin with purchasing managers' surveys today.

The figures continue with the Bank of England's decision on interest rates on Thursday and the latest non-farm employment figures from the US on Friday.

Elsewhere, the midcap index was up 33 at 6,779.1, the FTSE All Share up 13.3 at 3,062.41 and the TechMARK up 9.33 at 3,635.84.