The FTSE 100 index managed to break its losing streak but it was a generally uninspiring day for the stock market, with technology shares suffering another sell-off.
The tech-heavy Nasdaq had ended more than 100 points lower on Monday and there was some homegrown bad news. A profits warning from Computacenter made it the worst performing FTSE 250 stock and there was a disappointing trading statement from Eidos, the computer games group.
The worst three performers in the FTSE 100 were technology stocks Sema, Misys and Baltimore and the Techmark 100 index dropped 91.39 to 3,346.41.
The day's macro-economic data should have been broadly supportive for equities. The headline rate of UK inflation pushed up to 3.1 per cent in May, but the underlying rate - the measure targeted by the government and the Bank of England - proved to be in line with predictions at 2 per cent.
And, just to prove that inflation is a difficult concept to measure, the harmonised rate designed for comparison with the rest of Europe dropped to 0.5 per cent, the lowest level in the European Union.
Meanwhile, data on US retail sales confirmed the picture of a slowing economy. Sales fell 0.3 per cent in May, the second monthly decline in a row.
The figure bolstered hopes that the Federal Reserve open market committee would leave interest rates unchanged at its next meeting on June 27th/28th.
The US figures inspired Footsie to reach its best level of the day, up 84.3 at 6,515.2. But when Wall Street opened, it became apparent that US investors were not reacting quite so positively. The Dow Jones Industrial Average and the Nasdaq Composite were little changed by the time the London market closed.
That prompted Footsie to drift down from the day's high and the blue-chip benchmark ended up just 16.2 at 6,447.1. At least, that gain was the first recorded since the previous Tuesday.
The FTSE 250 index dropped 19.8 to 6,475.4 while the SmallCap edged up 2.1 to 3,310.0.
Pharmaceutical and oil stocks were among the better performers yesterday, with the former benefiting from their defensive appeal and the latter from the recent surge in the oil price above $30 (€31) a barrel.
Turnover was up from Monday's levels but still poor by first-quarter standards, with 1.35 billion shares traded by the 6 p.m. count.
