The FTSE 100 Index bounced around yesterday, making spectacular gains to record heights beyond the 6,000 mark in the morning but falling to profit taking later. It closed 41.6 points down at 5956.3.

Traders reported that US institutional investors bought up huge baskets of shares in most of the top 100 companies in the morning, driving the index at one point to 6105.8 points - way beyond any previous record.

Minutes after this high was reached, the index staged a dramatic bounce, wiping out more than 200 points.

The blip was blamed on the new Sets electronic trading system which, while fast, also tends to create dramatic swings.

The market then seemed to settle for most of the afternoon moderately ahead of yesterday only to fall to late profit taking.

The profit-taking belied gains made on the Dow Jones US index in its opening trading, which followed on from positive performances on yesterday's Asian markets.

The US investors who piled in this morning were competing with British institutions and individuals all keen to finish their investing before the end of the tax year.

PEP providers have enjoyed a dramatic inflow of funds over recent weeks. There is just a year to go before they are withdrawn from the market.