Some of the oldest of the "old economy" stocks in the FTSE 100, the oil majors and the banks, yesterday galloped to the rescue of a London market reeling from the impact of some bad news in the high-tech areas.
The strength of oil and banking shares, allied to a good start on Wall Street, pulled the FTSE 100 index up from a groggy, but never hugely pressured, start to the day. For the rest of the market, especially the tech stocks, it was a much more difficult session with sellers gaining the upper hand for much of the day, after the big slide in shares in Amazon.com, the US online retailer, on Wall Street on Friday.
That performance grabbed the weekend headlines and produced ripples of unease right across the London market where memories of the last sell-off in the technology arena are still fresh in the memory.
Matters were made worse with news that takeover talks between Freeserve, the Internet service provider, and T-Online, the German Internet division of Deutsche Telekom, had broken down. Shares in Freeserve and its parent, Dixons, the electrical goods retailer, fell sharply.
Dealers were impressed with the resilience of the top 100 stocks, especially so close to the outcome of the two-day meeting of the US Federal Reserve's open market committee, which should be announced at 7.15 p.m. London time tomorrow.
Although the consensus suggests the FOMC will leave rates on hold, analysts expect the Fed to say it retains a tightening bias.
Meanwhile, the Bank of England's monetary policy committee commences its regular two-day meeting a week tomorrow, with most economists similarly expecting no change in rates.
The underlying feel to the market remained reasonably secure, dealers said. Granada Media and Carphone Warehouse, coming to the market soon, traded at a premium to their issue price ranges, according to Financial Spreads and Cantor Index, the spread betting firms.
Financial Spread quoted 200-235p for Carphone Warehouse, compared with an indicative price range of 170p to 220p, and 540p to 550p for Granada Media, compared with an indicative range of 465p to 525p.
Cantor Index quoted 221p to 229p for Carphone Warehouse and 540p to 550p for Granada Media.
The FTSE 100 rallied from an initial 22.5 decline and recorded a 56.2 gain at best, before tailing off at the close to finish a net 13.7 ahead at 6,405.2.
The FTSE 250 settled 3.7 to the good at 6,566.9, having been in negative ground throughout the morning and early afternoon, while the SmallCap index was finally 12 off at 3,367.0.
The worst of the lot was the Techmark 100 which dipped to a low of 3,393.25 before clambering back up to post a 26.4 decline at 3,415.74.
