THE recent surge in British share prices, which has seen the market climb over 130 points since just before Christmas showed clear signs of running out of steam yesterday.

Dealers attributed the London market's reluctance to follow Wall Street higher to the absence of any of the rumoured takeover bids actually hitting the market yesterday. But other market observers said the shock news that Mr Michael Lawrence, formerly chief executive of the stock exchange. was leaving the organisation after losing the confidence of the board" had clearly unsettled the market.

The FTSE 100 index, which celebrated the overnight rise on Wall Street by moving to a fresh all time high of 3,723.0 during the morning, subsequently struggled to maintain its poise, eventually closing a net 1.5 off at 3,714.1.

There was more comfort for the market's second liners, however, with the FTSE Mid 250 index in good form and lifted by another burst of takeover speculation in the life assurance sector, as well as some keen buying interest in a number of the investment management groups.

Turnover was again surprisingly high, with activity in non FTSE 100 stocks accounting for 58 per cent of the total.

The head of market making at a leading UK securities house said he expected the London market to encounter a bout of profit taking in the short term and said the FTSE 100 could well fall back to the 3,650 level in the absence of any of the rumoured bids.

After its initial rise, the Footsie began to lose heart in mid morning.