A strong opening performance by Wall Street revived a London stock market that had earlier seen the FTSE 100 index dip below the 6,000 level.
Wall Street came in exceptionally strong, easing the anxieties across most European markets ahead of today's speech by Mr Alan Greenspan, chairman of the US Federal Reserve.
In his regular bi-annual Humphrey Hawkins testimony on the outlook for the US economy, Mr Greenspan is expected by some observers to outline to the Senate banking committee that US gross domestic product growth will slow to around 2.5 per cent this year.
The Greenspan speech, nevertheless, remains one of the most important global events of the week. As one senior UK market man said: "More than anyone else, Greenspan has the capacity to turn world markets upside down and everyone knows that. Marketmakers are told to go into a Greenspan day with a small short to level book, if possible."
To add to traders' caution, the market is also waiting for a long list of important company results this week. Corporate earnings growth remains a worry, given the slowing economy and the still-strong pound.
London's equity market was undecided for most of the day, moving higher during initial trading, on talk of more bids in the pipeline, and a strong early showing by some of the big European markets - notably Frankfurt and Paris.
On the downside, preliminary results from HSBC, the second biggest of the UK retail banks, proved a substantial drag on the market, after the bank's apparent lack of loan growth upset sentiment in the stock, one of the heaviest weighted stocks in the FTSE 100 index.
