It was a good news/bad news sort of a day in the City yesterday. The good news was that the Footsie closed higher, continuing the momentum started by its 106-point US-inspired rally on Friday. But the other side of the coin was that no one was really buying any shares or selling them either.

The rise of 28.3 to 6,284 in the FTSE 100, 21.6 to 5,643.9 in the FTSE 250 and 3.4 to 2,639.2 in the SmallCap was accompanied by turnover of only 900 million shares - the low end of the range. And almost a tenth of that reflected the consistently high turnover of Vodafone Airtouch plus heavy trade in a penny stock - Bula Resources. One pointer to the overall lack of energy in the market was the release of the latest purchasing managers' index. The PMI edged up to 54.2 in October from 54.1 in September and reached its highest level for two years. While bears took this as an indicator of rising rates, the market moved forward on banking sector activity.

The uneasy calm was reflected in the equity derivatives market as well as in government bonds, which settled higher after a sharp rally in US Treasuries. Even short sterling, which is one of the more sensitive interest rate indicators, was broadly unchanged.