A SERIES of revisions to the official Treasury economic forecasts came as no real surprise to a stock market still seeking to rebuild its confidence after last week's big sell-off.
Already in good form ahead of the official details, the market briefly slipped back, but quickly regained its poise and closed in good heart, helped by a strong opening by Wall Street.
At the close of a session once again affected by the lack of any really substantial institutional business, the FTSE 100 index settled 10.8 higher at 3,752.3.
The second line stocks, represented by the FTSE Mid-250 index, rallied sharply after Monday's late sell-off, with the index recouping 8.2 at 4,347.7.
Senior dealers were generally impressed with London's resilience this week to Wall Street's volatility since last Friday's non-farm payroll report which triggered the 114 point slide in the Dow Jones Industrial Average.
"London has performed exceptionally well since Wall Street fell out of bed last Friday," said the head of trading at one British securities house. "If we were going to fall out of bed it would have happened by now," he said.
Another top trader at a European-owned broker said he expected some form of decoupling by British and European markets from the US.
The futures market was mildly supportive of the cash market, holding relatively steady throughout the session.
Footsie began the day on a cautious note, with market-makers worried about the effect on London of the late slide by the Dow just before the close of trading in the US, when the average dipped 37 points.
The leading index kicked off marginally higher and almost three points up, but almost immediately began to gather momentum. "There were no real sellers about and the market was always going to close well up on the session," said one marketmaker.
Up 16 points ahead of the Treasury revisions in the summer economic statement, the market briefly corrected, and thereafter held steady for the rest of the day.
The Treasury revisions were almost bang in line with expectations, with the upward move in the projected 1996 public sector borrowing requirement to £27 billion sterling well received, by a market looking for a figure nearer £28 billion.
The downward revision in the 1996 gross domestic product growth figure - from 3 per cent to 2.5 per cent - had also been expected.
Chancellor of the Exchequer Mr Kenneth Clarke's comment that he expected inflation to continue to fall was given a good reception.
Turnover in equities at the 6 p.m. reading just crept over the 700 million mark, eventually reaching 701.6 million shares. That figure, however, was boosted substantially by heavy trading in Sunleigh, one of the market's penny stocks, which accounted for 84 million shares. Customer business on Monday was valued at £1.39 billion.
