THE sparkling debut by Railtrack, which accelerated to produce a 16 per cent premium to the public offer price, could not obscure an otherwise dismal start to the week by London's equity market.

London simply could not respond to last Friday's excellent performance by Wall Street, which closed only two points off its previous record high.

Dealers put forward a number of reasons for the market's lacklustre performance, including an exceptionally weak showing by oil stocks after news of the resumption of Iraqi oil sales, the absence of any of the much rumoured takeover bids and a revival of last week's rumours that a big rights issue could be on the cards.

Other bearish stories said to have affected sentiment were that the market is becoming increasingly uneasy over the prospect of a Labour government after the next general election.

At the close of a session predictably dominated by trading in Railtrack, the FTSE loo index had declined 11.4 points to 3,778.2.

The FTSE Mid 250 index, on the other hand, was never really troubled by the progressive malaise that affected the market's leaders, and settled 8.9 points higher at 4,522.3.

British Biotech was the main driving force behind the splendid showing of the second liners' index. Its shares spiralled upwards ahead of a progress report, expected today, on its crucial anti cancer drug, Marimastat.

Such is the enthusiasm of some drugs analysts, that they foresee British Biotech entering the FTSE 100 index if the drug is commercially viable.

Dealers said the big institutions had decided to stand back and wait for news from the US Federal Reserve Open Market Committee meeting which gets under way today.

No one really expects any shift in US interest rates, but there is always the chance of a shock decision," said one trader.

All eyes were on Railtrack at the outset of trading. The stock began its stock market life at 225p, the very top of the forecast range, and edged up in hectic trading to reach 229p, before encountering heavy selling by market "stags" and sliding back to end the day at 218.5p.

Market makers expected small investors to continue to take profits in the stock in the short term, but at the same time expected the big institutions to continue to add to their holdings.

Turnover in equities, completely overshadowed by trading in Railtrack, reached 758 million shares by 6.00 p.m. Railtrack accounted for 161 million shares, of 21 per cent of the total.