The FTSE 100 index staged a brief rally in mid-afternoon but by the close had subsided to its fifth consecutive decline.

There were at least some signs of life in last week's "walking wounded" with Marconi rebounding 7 per cent on take-over hopes and Baltimore gaining 15 per cent to be the best performing stock in the FTSE 250 index. But the London market was struggling from the opening, as investors reacted to Friday's falls on Wall Street, after weak non-farm payroll data had indicated that the US economy might still be in the doldrums. By mid-morning, the Footsie was down 58.7 points at 5,420.5, its lowest level of the day.

But when Wall Street opened again, the Dow Jones Industrial Average and Nasdaq Composite were modestly higher and the UK market duly managed a rally, hitting a day's high of 5,487.9. The blue-chip benchmark could not hold on to its gains, slipping 10.3 to 5,468.9, the index's lowest close since April 3.

And although the FTSE 250 and the SmallCap were also lower, the Techmark 100 index of leading technology stocks inched 3.29 higher to 1,557.98.

The latest domestic economic data did not disturb the market, with output prices rising just 0.4 per cent year-to-date in June, the lowest annual gain since February 1999. That will please the Bank of England's monetary policy committee but the Bank will continue to worry about the pressure of consumer demand as indicated by rising retail sales and house prices.

After Marconi's grim news last week, investors are highly sensitive to bad news from the corporate sector. Queens Moat Houses and Eagle Eye Telematics were the latest groups to issue profit warnings.

With little prospect of further rate cuts in the UK, investors are now pinning the bulk of their hopes on a revival in the US and global economies to spur a recovery in the FTSE 100 later in the year.

Turnover was 1.85 billion shares by the 6 p.m. count, with Friends Provident chalking up more than 100 million shares on its first day of trading as the stock moved to a modest premium. Marconi and Vodafone were also very active.