A profits warning from BAE Systems, the aerospace group, helped ensure the third negative day of the week for the FTSE 100 index.
But while the index drifted closer to the 6,000 level, the bottom of its trading range since end-1998, it never looked like breaking below it. The blue chip benchmark closed at 6,060.5, a fall of 27.6, compared with a low for the day of 6,040.4.
The BAE systems warning clearly took the market by surprise, knocking a quarter off the company's market value, and prompting turnover of more than 200 million shares. It is rare for any stock, apart from Vodafone, to trade more than 100 million shares in a day.
The UK market has seen a stream of profit warnings in recent months but most have come from the small company and technology sectors of the market. BAE is one of Britain's largest industrial businesses.
Fortunately for the market, there was also some good news from the corporate sector. Electrical retailer Dixons said that the Christmas trading period had been buoyant, with like-for-like sales up 6 per cent. The shares gained almost 11 per cent.
There were also some double digit gains for individual TMT (telecom, media and technology stocks) that were battered in the last three quarters of 2000. Telewest, FI and Sema all gained more than 10 per cent. That helped the Techmark 100 index defy the downward trend of the Footsie; it closed up 15.29 at 2,448.63.
The other indices also inched ahead. The FTSE 250 index gained 5.1 to 6,597.9 and the SmallCap 2.1 to 3,183.5.
There was little sign in the market that investors had much hope for a cut in interest rates when the Bank of England's Monetary Policy Committee announces its decision at noon today.
It was a day when the market was largely able to follow its own devices. Wall Street was mixed, with the Nasdaq higher and the Dow Jones lower during London trading.
Turnover was once again very active, thanks to BAE and another busy day in Vodafone, which traded almost 500 million. By the 6 p.m. count, 2.55 billion shares had been traded overall.
