London's equity market overcame a twitchy start to the day and managed to cling on to relatively modest gains among the leading issues. But the initial queasiness of the leaders did not run through to the rest of the stock market, where the second-liners delivered a powerful performance and the smallcap stocks made further progress.

Dealers said the institutions had moved in shortly after the start of the day to pick up a wide range of stocks seen as cheap after Tuesday's heavy fall, which saw the FTSE 100 retreat more than 2 per cent, as London followed Wall Street's four-session setback.

At the finish, the FTSE 100 was 29.8 ahead at 6,276.2, having swung in a range of almost 70 points. At its best, only minutes before the close, the index was up 33.9 at 6,279.9. The FTSE 250 advanced steadily to close only a fraction off the session high, 6,066.1, to finish a net 48.0 up at 6,065.9. The FTSE SmallCap closed 4.7 up at 2,821.3, having hit a peak 2,821.8. Dealers insisted that activity in the market remained low key, but warned that business would increase very quickly as the holiday season petered out and interest rate-sensitive news on both sides of the Atlantic flooded in.