A modest decline in the FTSE 100 and the Techmark 100 index gave the impression that London's stock market had suffered another setback yesterday.
But a closer inspection of the individual performances of the FTSE 100's constituents and the other FTSE indices - the 250 and SmallCap - showed that sentiment in London remained pretty much intact.
A closing 18.6 fall in the FTSE 100 to 6,566.2, was entirely down to yet another dismal showing by London's telecommunications giants, Vodafone Group and British Telecommunications, both of which continued to suffer from the aftermath of the auctions of third generation mobile phone licences in the UK and Germany.
Balanced against the telecom weakness was another powerful showing by BP Amoco and Shell, which continued to drive ahead as crude oil prices held well above $30 (€33) a barrel.
The FTSE 250 had a bit of a rocky ride during the day, making good progress and posting a 13.9 gain early in the session, before tailing off in the early afternoon then getting a second wind and finishing 9.4 higher at 6,896.3.
The FTSE SmallCap was more sedate; it never looked likely to dip into negative territory, and gradually climbed to close at a session best of 3,463.2, up 6.4.
Some dealers complained about London's refusal to acknowledge the good news on US interest rates emanating from across the Atlantic on Tuesday night, when the US Federal Reserve's Open Market Committee announced it was leaving rates on hold.
While global markets had mostly been expecting the Fed to hold fire on rates, there was still an element of relief with the announcement, which was accompanied by a statement reaffirming the Fed's close determination to respond instantly to any inflationary trends.
Other traders noted that Wall Street had come off its best levels on Tuesday evening, in the wake of the Fed announcement, although it finished a healthy 59 points up on the day, remaining well clear of the 11,000 level. The Nasdaq also managed to close up on the session.
"It's difficult to imagine a more comforting scenario from the FOMC [Federal Open Market Committee] meeting," said one market-maker. "That was easily the best the market was going for. What we've seen today is a small dose of profit-taking after a good run. Nothing wrong in that," he added.
Some of the more bullish market observers are now looking for London to embark on a decent run as the summer holiday season winds down. There was more evidence yesterday of an upturn in programme trading activity. Turnover in equities reached 1.55 billion shares, well below Tuesday's 1.79 billion shares, but nevertheless well above recent daily levels.
