A bumper day of takeover action and rumours of many more bids in the pipeline saw most of the main FTSE indices continuing to hit record highs yesterday.

Complementing the takeover stories - the biggest of which, Royal Bank of Scotland's counter-bid for NatWest, ironically triggered big falls in both stocks - was another day of gains for some London heavyweights. These included BP Amoco, easily the biggest British stock in market capitalisation terms, and two of the big three pharmaceutical groups, Glaxo Wellcome and SmithKline Beecham. But the stock market's early euphoria was given a severe shaking in mid-session as a sudden bout of twitchiness developed into a full-scale retreat either side of the Wall Street opening.

At its best of the day, the FTSE 100 index had sailed through the 6,700 level and hit an intra-day high of 6,759.3. But it ran into negative territory before scrambling back to finish the day 7.5 ahead at a closing high of 6,692.3.