News of another big potential European merger, involving British Steel and Hoogovens, the Dutch steel group, provided a solid background for a London market that showed signs of running out of steam yesterday afternoon.

British Steel was not the only takeover story circulating in the stock market. SmithKline Beecham was a strong performer all day amid market hints that Novartis, the Swiss pharmaceuticals group, was looking to merge with the Anglo/US drugs group.

The FTSE 100 index finished the day a net 52.2 higher at 6,302.2. The other FTSE indices showed the All-Share index up 22.5 at 2,923.38, the FTSE 250 finishing 41.3 firmer at 5,709.0, with the FTSE SmallCap in negative territory finishing 1.8 off at 2,547.8.

Turnover was a disappointment, at 997 million shares, just failing to reach the 1 billion mark. Non-FTSE 100 stocks accounted for 51 per cent of the overall figure.