A sharp fall in the shares of Vodafone, the mobile telephone operator that is the UK's largest stock, ensured that the FTSE 100's four-day winning run came to an end.
Amid talk in the market of broker downgrades, and following WorldCom's warning on Wednesday, Vodafone shares slipped 8.6 per cent, knocking the equivalent of 63.7 points off Footsie.
Other corporate news was also not particularly helpful for the market. Shell's bumper third-quarter profits may annoy the fuel tax protesters but they fell short of analysts' expectations. And with the oil price dropping in response to an agreement between Israeli and Palestinian authorities, the big oil stocks suffered.
First-half results from Boots also proved disappointing, with the pharmacy group's shares falling 4.4 per cent.
ICI announced that it would halve its dividend next year but that decision did not have the symbolic impact of old. Indeed, ICI shares rose on the day.
On the positive side, the leading benchmark was buoyed by the banking sector, which provided six of Footsie's top 20 performers on the back of hopes that interest rates might fall next year.
Wall Street gave London some support with Nasdaq rebounding on good news from Intel and official figures showing that third-quarter US productivity growth was still strong.
By the close, the FTSE 100 index was down 65.6 at 6,392.0. The other main indices, however, moved ahead. The FTSE 250 gained 29.6 to 6,712.7, the SmallCap 11.3 to 3,324.4 and the Techmark 100 12.52 to 3,443.91.
A weak purchasing managers' survey on Wednesday, coupled with a flat retail sales report, raised hopes that interest rates might fall shortly.
But Mr Richard Jeffrey, director of economics at ING Barings Charterhouse Securities, cast doubt on the theory. "The economy is becoming tighter and tighter. It would be a bizarre decision for the authorities to cut rates when unemployment is declining."
The UK market faces several significant tests over the next week, with the US non-farm payroll figures out today, the US elections on Tuesday and the Chancellor's pre-Budget statement on Wednesday.
But despite yesterday's setback, the market seems in a more confident mood than it did two weeks ago, when the high oil price and US profit warnings forced Footsie down towards 6,000.
Turnover was once again robust, with the help of heavy activity in Vodafone. By the 6 p.m. count, 1.89 billion shares had been traded.
