TALK that a number of US institutions had been switching funds from US stocks into European markets, with much of the cash moving into British stocks, helped London equities resist much of the downward pressure from Wall Street yesterday.

The market continued its solid performance during initial exchanges despite the 200-point slide in the Dow Jones Industrial Average. But it began to look extremely uneasy towards the close.

Wall Street dropped 70 points shortly after opening, causing widespread alarm in European markets, before embarking on a good rally which saw the Dow down less than 20 points 30 minutes after the close of London trading.

There was no apparent reason for Wall Street's latest fall. The producer price index for March came in 0.5 per cent higher, more or less in line with market expectations. US Treasury bonds were ahead in the wake of the PPI data before coming off in later trading.