MARKET REPORT - LONDON

THE British market got within six points of the 4,000 level on the FT-SE 100 index yesterday before suddenly running out of steam.

After burning itself out in the effort to push through 4,000, the market quickly turned round, sliding back to finish a busy session a net 10.2 off at 3,964.1.

Dealers were quick to point out that Footsie had penetrated its previous all time intraday high, reaching a record of 3,994.1.

The expectations that yesterday would see a concerted effort at driving through 4,000 were centred on the expiry of the September FT-SE 100 and 250 futures and index options, which had been seen by dealers as providing the ideal background for a burst into new ground by British stocks. In the event, the expiries went off relatively quietly. Footsie was pushed higher at the outset, opening modestly higher and then gaining momentum during the morning and launching a determined attack on 4,000 before stalling and drifting back after the big expiries.

Apart from the hype associated with the expiries across derivatives markets, there was plenty to occupy the minds of equity strategists and fund managers.

Monday's meeting between Mr Kenneth Clarke, the Chancellor of the Exchequer, and Mr Eddie George, governor of the Bank of England, could well cause tremors in the British market, while Tuesday's meeting of the Federal Reserve's Open Market Committee might bring an increase in US interest rates.