It was a typically subdued start to the week in London equities. But any worries that the market would tumble into freefall in the wake of the steep decline in the Dow Jones on Friday were quickly dispelled.

The FTSE 100, London's benchmark index, dipped just over 50 points at the start of the session, but quickly stabilised as it became clear that the institutions were not prepared to sell large lines of stock.

And that was also the case with most of the other FTSE indices, although the All-Share index, in which the FTSE 100 has a heavy weight, also lost ground. What became increasingly clear as the session wore on was that dealers were underwhelmed by the institutional order flow.

"It's a hot and sunny Monday, after a hot and sunny weekend. We've got Royal Ascot tomorrow and the market is still being distracted by the Euro 2000 football tournament - don't expect fireworks with that sort of background," said one trader.

Other traders said that other forthcoming sporting events, especially Wimbledon and The Open golf championship, would also divert attention from the market.

By the close, the FTSE 100 was down 35.8 at 6,490.2, having hit a session low of 6,467.5 only minutes before the close, when Wall Street had given up all of its opening gains and fallen into negative territory. But the Dow showed no signs of repeating Friday's 265-point fall and the Nasdaq followed up a resolute showing on Friday evening with modest gains yesterday.

The FTSE 250 index ran up 22.9 to 6,556.4 after a day's best of 6,566.4, a performance stimulated by a burst of takeover-inspired interest after news that Saatchi & Saatchi, the advertising agency, was involved in bid talks. That inspired flurries of buying interest in other advertising stocks such as Cordiant, Aegis and Incepta.

Also driving the 250 index higher was a bunch of high-technology stocks led by Psion. Psion's shares rocketed after a report that the company, along with mobile phone groups Ericsson, Nokia and Motorola, is considering a flotation of the Symbian software join t venture.

The FTSE SmallCap also moved ahead, closing 2.1 firmer at 3,332.3, well below its high of 3,348.4 recorded during the first two hours of trading.