An end to the sequence of five consecutive sessions of strong gains in London's benchmark index, the FTSE 100, looked on the cards for much of yesterday as profit-takers reacted quickly to the cut in US interest rates announced overnight by the US Federal Reserve.

But a last-gasp effort by the bulls just saved the day for the market's optimists, with the FTSE 100 finishing a rather tense session 2.2 firmer on balance at 5,209.3. Earlier, the index had driven up to 5,245.4, before reversing and falling away to a day's low point of 5,153.3, all within the first hour of trading.

The fact that the index closed above the psychologically important 5,200 level for a third consecutive session was being viewed as more important for market sentiment than the winning sequence. "The Fed move on rates was crucial; rate cuts from the Bank of England's monetary policy committee and the ECB are being taken as read too," said one market-maker.

While the 100 index lost ground, the FTSE 250 and FTSE SmallCap indices maintained their recent good progress and the Techmark 100 showed only a modest decline. The 250 index closed 27.5 higher at 5,526.9, extending its gain over the past four sessions to 185.2, or 3.5 per cent. The SmallCap put on 15.4 to 2,382.7, its fifth consecutive gain which has seen the index advance 65.19, or 2.8 per cent. Market observers said they were not too surprised to see the leaders run into pockets of sometimes keen profit-taking after such a strong run, which saw the 100 index up more than 200 points during the previous five sessions.

And there was some bearish news from Qualcomm, the US telecoms group - announced after Wall Street closed on Tuesday evening - which took some of the gloss off the excellent performances by the Dow Jones Industrial Average and the Nasdaq Composite following the 50 basis points cut in US interest rates.

The strategy team at Credit Suisse First Boston said: "Our US economists see the Fed continuing to cut rates so long as unemployment is rising. This leaves them forecasting another 50 basis points cut at the December 11th meeting and 25 basis points both at the January 29/30th and March 19th meetings. Turnover in equities remained robust, reaching 2.2 billion shares.