There was a much-needed return of confidence in London's equity market yesterday with all the main indices finishing in positive territory on growing hopes that another cut in US interest rates could be on the way.

At the end of a turbulent session, the FTSE 100 index spurted ahead in the post-market auction to close a net 24.5 higher at 5,941.2. Prior to the auction, which sees all overhanging trades unwound, the FTSE 100 was down about five points and looking vulnerable.

But it was a different story for the rest of the market which never really threatened to fall away substantially.

The afternoon setback in the Nasdaq affected technology, media and telecommunications stocks but the Techmark 100 managed to finish with a net 10.91 gain at 2,353.66. The market's confident performance throughout the morning and early afternoon reversed in mid-afternoon in the wake of some weak US economic news.

The news from the US, announced at 3 p.m., showed a dramatic deterioration in US consumer confidence, which plummeted from a revised 115.7 for January to 106.8 for February, the lowest sentiment figure since February 1996.

The numbers caused a dramatic, but short-lived about-turn in the Dow Jones Industrial Average and the Nasdaq Composite, both of which fell heavily influencing the London market in the process.

Prior to the consumer confidence news all the talk concerning the US suggested that another reduction in US rates was looking increasingly likely and that Alan Greenspan, chairman of the US Federal Reserve was likely to give indications to that effect in his speech later today to the House of Representatives.

The big winners in the FTSE 100 came from both the old and new-economy areas of the market, but it was mostly the resurgence of demand for new sectors that drove the index forward.

Vodafone's recent rally from a low-180p provided a substantial lift for the index, as did the performance of Pearson, the media group which owns the Financial Times, which was given a big boost by Goldman Sachs. And old sector stalwarts such as CGNU and a number of the banks were also in good heart.

Turnover in equities was slightly disappointing, reaching 1.75 billion shares by 6 p.m.