An early attempt to drive British equities higher again succeeded yesterday, but for the leaders the gains were only brief. For the second-liners and small caps it was a different story, with indices representing both hitting intra-day and closing records.

The FTSE 100 index pushed up strongly at the outset of trading, responding to Wall Street's excellent showing on Friday, when it posted a 72-point gain after the non-farm payroll report.

And it also reacted to further good gains across Asian markets, which are increasingly looking as if they have seen the worst of their recent turbulence.

At its best of the day, not long after trading commenced, the FTSE 100 was up 20.5 at 5,560.2. But the early gains were quickly eroded by pockets of profit-taking. It soon became clear that no takeover stories were developing in the market place and that many investors were becoming uneasy at the pace of the market's advance in recent sessions.

Indeed, there was bad news about the bid battle for Energy Group, with a report suggesting an offer for the company from Nomura, the Japanese investment bank, would attract a reference to the Monopolies and Mergers Commission.

The index steadily drifted back, recording a session low of 5,590.3, down 39.4, in mid-afternoon before stabilising and closing 28.8 easier at 5,600.9. Sentiment was unsettled by a rather indecisive performance by Wall Street.

London's second-liners, however, were always being sought and the FTSE 250 index settled 7.9 firmer at a record close of 4,978.3, having reached an intraday peak of 4,980.6. The SmallCap finished up 6.1 at a closing and intra-day high of 2,416.7.

The day's economic news, producer price data for January, gave no cause for inflationary concerns, coming in weaker than forecast. Retail price data are out this morning.

In the latest survey of British fund managers carried out for Merrill Lynch by Gallup during February 2nd to 4th, buyers of British equities outnumbered sellers by 14 percentage points, the highest figure since mid-1995.

The survey showed that FTSE 100 stocks were more popular than ever, with a record 79 per cent of respondents preferring the leaders to FTSE 250 stocks and with 83 per cent saying they expected the Asian turmoil to have only a marginal impact on corporate earnings.