The prospect of a cut in UK interest rates after next Wednesday and Thursday's meeting of the Bank of England's monetary policy committee generated just enough buying interest yesterday to restore some of the London market's recent loss of confidence.
But while the FTSE 100 managed to stop the rot, having lost ground during the previous two sessions, it was not a convincing performance, with turnover unable to match levels of activity set earlier in the week and the index only just finishing in positive ground. It closed a net 4.6 firmer at 6,256.4.
There was a modest gain in the FTSE 250 index, up 15.2 at 6,757.5, but the FTSE SmallCap was always in negative territory and settled 4.5 off at 3,315.3.
The Techmark 100 suffered once again from the effects of another shift out of TMTs and into the old-economy stocks and settled 38.81 down at 2,732.22.
Sentiment in London was affected during the afternoon session by news of the January non-farm payroll report, which was surprisingly strong, showing the creation of 268,000 new jobs during the month.
That news pulled the Dow down around 60 points and the Nasdaq down 70 points during London trading hours, as US rate hopes lessened.
The chances of a cut in domestic interest rates lessened slightly in the wake of the most recent economic data which showed house prices up 2.5 per cent in January, according to the latest survey by the Nationwide Building Society. Retail sales rose at their fastest rate since May last year.
Thursday's stronger than expected UK purchasing managers' index of manufacturing activity had already dented rate cut hopes. Nevertheless, 23 of 29 economists polled by Reuters are looking for a quarter-point reduction.
The FTSE 100 winners list was headed by Marks & Spencer, the UK's flagship retailer, which has suffered badly in recent years from falling sales and an increasingly dowdy image. The shares' revival yesterday came as the company unveiled its newest arrival, George Davies, architect of Next's early successes and latterly the designer of Asda's hugely successful clothing range.
