For the fourth day in succession, UK equities found themselves in thrall to Wall Street. But for the first time in the week, the initial tone in New York was positive, and that allowed blue-chips in London to stage a modest rally.

On Tuesday, Wednesday and Thursday, poor opening performances by the Dow Jones Industrial Average had ensured closing losses for the FTSE 100. But yesterday, the Dow started strongly, rebounding above the 10,000 level which it had lost on Thursday.

The catalyst for the rally was some more encouraging economic news, notably the Chicago purchasing managers' index which rebounded to 43.5 from 38.0 in July. Together with a 0.1 per cent rise in July factory orders, the data gave hope that the US manufacturing sector might be over the worst.

Footsie reached its high for the day of 5,378.0, up 45.3, after half an hour of Wall Street trading. The Dow then slipped back below 10,000 again but Footsie still had enough upward impetus to finish 12.3 ahead at 5,345.0.

The other indices could not keep up with the blue-chips.

The FTSE 250 slipped 0.8 to 6,116.3, the SmallCap 15.0 to 2,702.2 and the Techmark 100 fell 1.07 to another all-time low of 1,448.15.

Over the week, the FTSE 100 fell 2.3 per cent, the 250 and SmallCap 1 per cent each and the Techmark 100 4.9 per cent.

Eight months into the year, the FTSE 100 is down 14.1 per cent from its end-2000 level, while the All-Share is down 13.2 per cent.

The UK market seems on course for its second consecutive losing year, for the first time since 1973-74.

There were signs that the market was returning to life after the holiday period. Turnover passed 2 billion shares for the second successive session, with 2.18 billion traded by the 6p.m. count. Vodafone was exceptionally busy, trading more than 500 million.

Monday should be quiet because of the Labor Day holiday in the US but next week will prove an interesting test for the market, with traders and investors back at their desks after the break. Traders will be looking to see whether the institutions will be putting their spare cash into the market, especially as the FTSE 100 is close to its low for the year.