Some encouraging economic data from the US, which invigorated Wall Street, plus pockets of heartening domestic economic and corporate news, saw London's equity market finish another turbulent session on a firm note yesterday.

The expected but nevertheless much-welcomed 50 basis points reduction in US interest rates, announced overnight, was followed by a much stronger-than-expected NAPM survey of the US services sector yesterday afternoon. That saw the Dow Jones Industrial Average up another three figures after climbing 113 points on Tuesday evening.

On the domestic front the market was not displeased with evidence of rising consumer spending and news that house price rises had cooled, according to the Halifax survey.

The market is now hoping for another 25 basis points reduction in UK interest rates to be announced by the Bank of England's monetary policy committee at midday.

At the finish the FTSE 100 index was up 49.5 at 4,881.8, just short of its best of the day - 4,884.6 - having been down 73.8 at 4,758.5 at one stage.

It was a similar story with the FTSE 250, which closed 31.5 higher at 5,057.5, having fallen to 5,007.4 earlier in the day.

The FTSE SmallCap stayed resolutely in the red all day, ending a net 8.9 off at 2,151.1 while the Techmark 100, helped by a Colt Telecom-inspired rally in many of the tech and telecoms stocks, moved up 37.47 to 1,158.19.

But closing gains in London were hard won, with the market having to overcome another determined bear attack that held sway for much of the morning session and up until mid afternoon when US influences began to affect sentiment.

At one point the mood in London looked every bit as bleak as in recent weeks, as investors shunned the market despite the good news on US interest rates and some unexpected good news from Colt Telecom, one of the market's real problem stocks in recent months.

"To say this market is undecided is an understatement," said one marketmaker. "Sentiment shifts in seconds and it is dangerous to take a view."