The oil and telecoms sectors proved more influential than the retailers yesterday, allowing the FTSE 100 index to end its losing streak.
Disappointing Christmas trading reports from Great Universal Stores and from Matalan caused sharp falls in the share prices of both groups, and prompted a sell-off across the sector.
Next also reported a sales shortfall over the holiday period, although its shares recovered after an early dip.
Matalan's report, which referred to falling margins, was received particularly badly. The discount shopping group had barely put a foot wrong on the market before and was a candidate to enter the FTSE 100 at the next review. But that prospect looks rather distant now after yesterday's 34 per cent fall in its shares.
The big fall in Matalan, and a profit warning from London Bridge Software, helped push the FTSE 250 index down 33.7 to 6,564.2.
Fortunately for the other indices, there was plenty of good news elsewhere. Oil giants BP and Shell moved ahead, in response to a rise in the crude price, following a fall in US oil stocks and news of a planned cut in Saudi Arabian production.
And, crucially for the FTSE 100, the UK's largest stock, Vodafone, recovered after three straight days of losses. Its 4.5 per cent gain put around 25 points on the blue chip benchmark, helping Footsie to close 55.0 ahead at 6,114.9. It remains more than 100 points down so far this year.
The FTSE SmallCap gained 7.9 to 3,191.4 while the Techmark 100 rose 21.55 to 2,470.18. Among the tech stocks, Autonomy was by far the best performer in the FTSE 100 after it announced a new contract.
The big economic news event of the day turned out to be a nonevent. The Bank of England's monetary policy committee, as expected, left interest rates on hold at 6 per cent. There has been no change in rates since February last year.
Most investors seem to expect a modest fall in UK rates this year, with the Bank cutting twice to bring the level down to 5.5 per cent. But it may be some time before the first change.
