There were two shocks affecting London's equity market yesterday; firstly, the Bank of England's monetary policy committee did not raise domestic interest rates; secondly Alan Greenspan, chairman of the US Federal Reserve and widely viewed as guardian of global markets did not wave a big stick about US rates.
And as the London market chewed over those facts, the FTSE indices gathered themselves after a rather fraught morning and finished the day with modest gains.
Dealers insisted, however, that markets were by no means out of the woods in the short term.
They pointed to today's US non-farm payroll report as having the potential to turn global markets upside down if they add to the growing clamour for a rise in US rates. Many observers cite the recent evidence of both robust US economic growth and emerging inflationary pressures.
The Beige Book, published overnight and which sets the agenda for the forthcoming meeting of the US Federal Reserve's rate-setting open market committee scheduled for May 16th helped unnerve Wall Street on Wednesday, when the Dow Jones Industrial Average fell 250 points and the Nasdaq 78 points.
That performance saw London's benchmark index, the FTSE 100, open on a flat note, only to rally after the rate news came through at noon.
At the close the 100 index was up 14.8 at 6,199.6. having touched a session low of 6,162.5 and a day's best of 6,231.4.
There was a better feeling to the recently hugely-volatile Techmark 100 which closed 13.11 up at 3,720.41, again after a relatively thin trading range.
Talking over the day's events, dealers noted sterling's retreat during the session which followed the mpc's decision to leave UK interest rates on hold. "It is difficult to imagine any other reason than sterling's strength to explain the m.p.c. leaving rates on hold," said one dealer who said the move might only delay a rise later in the cycle.
Commenting on recent events in the market, particularly the failed bid for Blue Circle, Tony Jackson, UK equity strategist at Charterhouse Securities remained cautious: "If you want an explanation of the market's view of high tech stocks, only a month ago fund managers were dumping old economy stocks; now they're turning down cash for a cement company."
