London's equity market remained dogged by uncertainty over the outlook for UK and US interest rates yesterday, spending most of the morning session in negative territory.
After an afternoon tussle between bears and bulls, the FTSE 100 index settled a net 0.4 firmer at 6,061.3. At its best, Footsie posted a 28.7 gain.
Wall Street did its best to invigorate a flagging London market, with the Dow Jones Industrial Average following up Monday's 18-point rise with an 80-point gain 30 minutes after the London close.
Increasing the market's early discomfort was the decision by Merrill Lynch, one of the most powerful influences in global markets, to lop 200 points off its end-1999 FTSE 100 target, from 6,300 to 6,100.
Merrill's strategy team cited the recent rise in bond yields as imposing valuation strains on its previous forecast. US bond yields have been moving significantly higher in the past few weeks amid concerns that it might push the US Federal Reserve into nudging US rates higher.
