With New York suffering a near 300 points decline over Easter the stock market was clearly set for a bumpy session. In the opening minutes market- makers took advantage of the fraught climate to undertake a savage round of mark downs and Footsie was quickly off 112.4. Prices recovered marginally during the rest of the morning but it was not until the afternoon session that shares took on a more positive note, with a ripple of relief lifting them to their best levels of the day as New York, somewhat hesitantly, edged forward.
Once again US interest rate fears have done the damage. Evidence America will soon require more rate increases to take some of the heat out of the economy has upset Wall Street.
The Easter stumble has rekindled long-running fears the US bull market has been lassoed and world markets face an uncomfortable future. But, in the past few years, each time Wall Street has faltered the sheer weight of US pension money has produced another bounce.
As the world's biggest share market, New York's impact on London is always telling. But there have been signs the two markets have to some extent decoupled and it was perhaps significant that yesterday's slump was very much a knee-jerk, in-house reaction rather than the result of waves of selling.
Indeed, much of the day's trading related to year-end tax considerations with investors embarking on bed and breakfast deals or locking in profits.
Many institutions are awash with cash, prompting a certain amount of wariness they may take advantage of what they regard as unjustified price falls.
Hanson, the building materials group, was the worst-performing blue chip, ending 14p off at 272p. Next came BT, strong in the past few weeks on MCI considerations, off 17.5p to 428p.
Reuters was another big casualty, giving up 22.5p to 596.5p, its lowest for 12 months.
The shares are suffering from the strong pound, increasing competition and the failure of its cash handout to go through.
It was the turn of many of the high flyers to get burnt. Banks gave ground; ABN Amro Hoare Govett added to their discomfort by downgrading profit expectations for Royal Bank of Scotland, off 13p at 524p. Barclays, 1,216p earlier this year, was at one time down to 986.5p. The shares closed off 8p at 1,013p.
The banks have been in the forefront of the market's surge to record levels. Some suggest they hold the key to its direction; if they crack then shares are set for a dramatic downturn. Still, National Westminster bank eased fears of a financial slide by being one of only nine Footsie constituents to achieve a plus - 7p at 693.5p.
EMI, which has been in a dreadful spin on competition worries, enjoyed the biggest gain, up 29p to 1,144p on hopes supermarkets could after all provide a profit boost.
Somic, an obscure yarn business traded on the little-used Seats market, was the most untroubled share in sight - zooming 72p to 158.5p as Neville Buch, former head of Blenheim Exhibitions, joined the board after picking up a 22 per cent interest.
Amstrad, Alan Sugar's vehicle, was another on song with a 21.5p rise to 221.5p after selling its loss-making mobile telephone business for a fancy pounds 92m. Office equipment group Nobo rose 17p to 128.5p as takeover talks got under way.
Waverley Mining fell 10p to 55p as it dropped legal action against Bre- X, the Canadian group which appeared to have discovered what was billed as the richest gold mine in the world. But doubts about the value of the Indonesian prospect have since appeared.
Tuskar Resources' acquisition of further off-shore African oil interests left the shares off 0.25p at 5.25p. Premier Oil, where hopes of intriguing developments hover, gained 1.5p to 37p. Newcomer Avalon Oil, issued at 100p, reached 103.5p.
Loox, an optical group, returned to AIM after appointing stockbroker Raphael Zorn Hemsley as its adviser; unfortunately it also forecast bigger losses than expected, more than halving the shares to 37.5p.
Leeds, the textile group, rose 1.5p to 150.5p; the shares hit 260p a year ago. Stockbroker Henry Cooke Lumsden say the profit recovery is stronger than many suspect.
Analyst Peter Dzedzora looks for profits moving from pounds 5.5m to pounds 9m this year and then to pounds 10.5m. He predicts the shares will reach 270p.
r World Fluids returns to market tomorrow as Peterhead, a crane and fork lift truck operator. The colourful former chemicals, exploration and minerals company has undergone a root and branch overhaul since the shares were suspended, for the second time, last September. The restructuring involved the takeover of Peterhead, a mobile crane operator, and Birchwood, a fork lift truck group. The acquisitions were funded party by a placing and open offer of new shares at 70p. World Fluids arrived on the Dublin market in 1989. Its shares, now about to enjoy a full listing, were suspended at 7p.
r Newcastle United is expected to make a tame market debut today, possibly having to be content with a 10p premium to its 135p flotation price.