A big programme trade, said by dealers to have been valued at around £1 billion sterling (#1.4 billion) and weighted on the sell side, was behind the London stock market's poor performance yesterday.

Goldman Sachs and Warburg Dillon Read, two of the most powerful operators in the UK market, were both said to have been involved in programme trade activity.

The trade was described as a rebalancing of at least one of the big UK funds and was linked to the stock market debut of the newly-merged BP Amoco, which is now the biggest British company. Many leading investors will have to build market weightings in the new company. BP Amoco alone represents around 8 per cent of the FTSE 100 index.

Trading in BP Amoco dominated the London market and accounted for 18 per cent of overall business in London not long before the close.

Overall turnover in London topped one billion shares, the highest in a single session since the start of December, before being adjusted to 839 million shares. FTSE 100 stocks accounted for around 60 per cent of the total.

The BP Amoco and programme trade stories vied with the launch of the euro as the day's main talking point on London's stock market.

A weak pound against major currencies, including the euro, was seen by dealers as positive for British equities, while the recent weakness of Wall Street over the past couple of trading sessions and a poor showing by Asian markets yesterday were overlooked as British stocks opened in good heart.

The FTSE 100 posted an early 26-point gain, only to fall away later. By the close, it was a mere 3.2 lower at 5,879.4. At its worst the Foots was down 71 points. Outside of BP Amoco, it was the telecoms sector that captured the eye, with that sector providing the top five performers in the FTSE 100, thanks to a flurry of exceptionally strong new mobile phone subscriber figures for December. These confirmed the huge optimism that saw the sector outperform the British market last year.