After a tumultuous year, the last full day's trading of 1997 saw UK equities edge quietly higher. Expectations of a massive expiry in tailor-made, over-the-counter options failed to be fulfilled and the Footsie ended 19.9 higher at 5132.3.
The lower indices followed suit although they all lacked pressure from investor buying, fundamental economic news or strategists' opinions. FTSE 250 rose 35.9 to 4,768.1 and FTSE Small Cap gained 10.6 to 2,307.4.
The only apparent impetus was from overseas. The Dow Jones Industrial Average had ended 113 points higher on Monday night and the two leading Asian indices - the Nikkei 225 Average and the Hang Seng index - closed higher on the day.
Footsie was only marginally stronger in early trading yesterday but ticked higher to show a gain of 22 after the first hour. Then, a sell programme knocked the index back to a single figure gain and it stayed at the lower levels until Wall Street opened.
Further strength in US equities, partly reflecting strong consumer confidence data, helped Footsie kick into life again and it hit an intra-day gain of 32 points before settling by the close.
It was below the record high of 5,367 achieved at the beginning of October but well above the economists' consensus forecast. And some strategists believe that 1998 could be very flat for equities.
SocGen published its Footsie prediction for the end of next year. It says the index will finish no higher than the October peak.
Many economists and fund managers are beginning to factor a global slowdown into their forecasts because of the economic problems rattling through Asia. For example, Mr George Soros, chairman of Soros Fund Management, believes the abandonment of fixed exchange rates in the region could upset the international financial system if unchecked.
And, in Britain, there is a hunt for value among sectors that could shrug off the worst effects of a broad slowdown and tight interest rates.
Yesterday saw gains in selected media stocks as the market looked at the overall under-performance and the prospect for above average earnings growth.
Mr Paul O'Connor of BZW says companies such as Reuters will benefit from the boost provided by new technology as they develop their exposure to television.
Service companies such as Rentokil could also provide rare examples of double-digit growth, says Mr O'Connor.
Dealers said that shift was in evidence yesterday and went some way to explaining the day's out-performance of the FTSE 250 against the FTSE 100.
