As so often in the recent past, the British equity market's leading benchmark, the FTSE 100 index, encountered intense resistance as it penetrated the 6,000 level.
Although posting its fifth straight winning performance, Footsie was unable to maintain its initial momentum yesterday, coming off rapidly to finish well below its best after bursting through 6,000 at the start of trading.
But it still managed to end the day up 13.1 at 6,003.4, after a late tussle between bulls and bears that saw the index drop to a session low of 5,985.0, down 5.3, in mid-afternoon.
Dealers and fund managers remained worried that the Bank of England's monetary policy committee will sanction another increase in British interest rates to head off inflationary pressures.
"It is not only the threat of a rate rise that is causing the market problems; all the talk of recession and worries about corporate profitability are acting as a brake on the market. It just doesn't feel comfortable above 6,000," said one market-maker.
He also said that much of the talk around the City's dealing rooms concerned news of the linkup between the London and Frankfurt stock exchanges.
"If there were any doubts in London about Britain and monetary union at whatever time, they have been dispelled by this news; pan-European trading, sales and research has come a step closer."
In early trading, London appeared to shrug aside its interest rate worries, preferring instead to respond to Wall Street's excellent showing on Monday. The Dow Jones Industrial Average finished just short of the 9,100 mark in the wake of big gains in high-tech stocks.
Footsie moved into top gear, driving ahead to hit a session high of 6,036.6, up 46.3, with some dealers taking the view that more buy-side programme trading activity was fuelling the surge. Since the start of the third quarter, a number of programme trades have been helping to move the market higher.
At its best, Footsie was within 69.2 of its record closing level, reached on April 6th this year. Its all-time intra-day high, 6,150.5, was reached on April 14th.
The market's second-liners were generally unruffled by the erratic performance of the front-line stocks. The FTSE 250 finished 14.8 firmer at 5,603.3, although that figure remains a substantial 363.3 points off its record closing high of 5,966.6.
The only poor-performing index among the FTSE series was the SmallCap, which continued its recent under-performance and ended 3.7 down at 2,594.9.
It was no surprise that telecoms stories helped the best stocks of the day in the FTSE 100 and 250 indices. Scottish Power eclipsed the rest of the Footsie constituents, surging almost 12 per cent as the market enthused over its ambitions in the field.
And Securicor, holder of a 40 per cent minority stake in Cellnet, was the top FTSE 250 stock, amid revived talk that BT might be about to buy the holding.
