A powerful opening to the market week by UK equities - triggered mostly by Wall Street's good performance last Friday and another early flurry of takeover speculation here - was substantially eroded late in the session as London stocks fell back in line with the US market.
The latter showed the Dow Jones Industrial Average under heavy fire from the outset and down over 140 points not long after US markets opened.
That performance reflected a much stronger-than-expected report from the National Association of Purchasing Management for May, which refuelled market fears that US interest rates may rise after the next meeting of the US Federal Reserve's open market committee. That is scheduled for June 29th-30th.
The NAPM index came in at 55.2 per cent, compared with an April figure of 52.8 per cent and a consensus forecast of 54 per cent.
On the domestic front the economic news was mostly seen as positive for equities, with the UK Purchasing Managers index for manufacturing coming in at 49.4, the highest monthly figure since April last year, and ahead of a consensus expectation of around 49.
