What began as one of the familiar "wait and see" days in London's stock market saw sentiment dip, rally and fall again as the pent-up excitement over Mr Alan Greenspan's testimony to the US House of Representatives was quickly dissipated.

Mr Greenspan, chairman of the US Federal Reserve, did not give the markets what they were hoping for, a clear indication that an imminent cut in US rates was on the cards.

Markets had been hoping for a cut before the Fed's open market committee meets on March 20th. Mr Greenspan did say, however, that he thought the slowdown in the US economy could worsen before a recovery sets in.

Wall Street's response to the speech was disappointment. The Dow Jones Industrial Average moved sharply lower, posting a 158 points retreat as London closed for the day, while the recently battered Nasdaq Composite lost around 60 points at the same time.

So it was a dismal finish to a London session that looked to promise much during the early afternoon when the FTSE 100 had run up to within three points of regaining the 6,000 level.

With Wall Street on the run, the FTSE 100, although never looking likely to be routed, dribbled back and was around five points lower going into the post-market auction. And after the auction the index was left with a 23.3 decline at 5,917.9, a poor close to the day.

The other main indices gave a much more consistent performance. The FTSE 250, SmallCap and the Techmark 100 indices were always in negative territory, mostly burdened by weakness in TMTtype stocks and never looked likely to burst into upside territory.

London's disappointing finish was a reflection of diminished hopes that next week's meeting of the Bank of England's monetary policy committee might bring another cut in domestic interest rates.

Mr Richard Jeffrey, economist at Charterhouse Securities, said: "I would be very surprised to see rates cut after next week's meeting, especially given the strength of recent data releases."

London made heavy weather of it during early trading, with the technology, media and telecom (TMT) stocks, in particular, taking another beating in the wake of the three-figure slide in the Nasdaq on Tuesday evening.

The banks's sector burst into the spotlight again with news that the long-running merger talks between Abbey National and Bank of Scotland had been terminated by the former.