An early surge in shares on the FTSE-100 Index fizzled out this afternoon as the City responded to a dull opening on Wall Street.

In the morning, leading shares clawed their way back above the 5,900 level, peaking at 5915.7, only to slide through the afternoon, closing a marginal 8.5 points up at 5870.7.

A lift in overseas market sentiment and stronger futures helped stage the earlier recovery but demand for shares remained relatively low.

Bullish start

Gains in Hong Kong provided the necessary impetus for the bullish early start, while positive figures on trade and inflation helped improve sentiment.

Trade deficit figures came in lower than expected, showing Britain's exporters were having some success in fighting the strong pound.

Despite the afternoon's slip in value, the City welcomed a day with no falls.

Jeremy Batstone, head of research at NatWest Stockbrokers, said: "I think the market has recovered its poise following the panicky 48 hours on the world markets.

"Bid talk is lifting confidence and anticipation among traders of a number of positive trading updates from the banking sector is boosting the FTSE."

Risers and fallers

Standard Chartered lifted 12p to 761p, NatWest improved 12p to £11.19, while Barclays fell 10p to £16.34.

Halifax warmed 28p to 924p and Lloyds TSB managed a 19.5p lift to 889.5p.

HSBC strengthened 57p to £16.00 after comments from chairman Sir William Purves that the group was ready to deal with the Euro and squash the millennium computer bug.

The bank said trading in the first quarter of the year was on track but the fallout of the economic downturn in Asia was still emerging.

After a strong start, pharmaceuticals hit pockets of profit-taking.

While Zeneca soared 34p to £24.89, Glaxo Wellcome fell 23p to £16.48 and SmithKline Beecham fell 11.5p to 663.5p, having a major impact on the whole index.

Unigate jumped 28.5p to 665p on the news that talks had been called off to buy food and furnishings business Hillsdown, down 23.5p to 183p.

While an enlarged company would have created a £3bn giant, investors were heartened by the announcement as Unigate would have had to fork out nearly £1.6bn for the business.

Brewer Fuller, Smith & Turner urged investors to take "pride" in their company after annual profits lifted 17% to £12.85m.

The company lifted 30p to 502.5p, helping to boost a number of stocks in its sector with Bass soaring 33p to £11.25, Pizza Express gaining 30p to 847½p and caterer Compass strengthened 85p to £12.70.

Yorkshire Water announced plans to spend £1m a day on its services for the next two years as part of its on-going £1.8bn investment programme.

The company thinned 17p to 461.5p.

News that billionaire George Soros was pumping £100m into Delancey Estates to act as his investment vehicle in the UK property market sent the company into orbit - up 47.5p to 150p.

British Aerospace climbed 24p to 543p after it announced that it would be forming a joint venture with French engineering giant Dassault Aviation to research hi-tech systems for combat aircraft.

Less fortunate was BSkyB which fell 9p to 431p after Premier League officials rejected its plans for pay-per-view soccer.

Biggest fallers of the day were Nycomed down 66p to £18.57, Carlton Communications down 17.5p to 492.5p, Diageo down 19.5p to 692.5p and Scottish & Newcastle down 24p to 860p.

Risers included Misys up 184p to £36.96 and British Aerospace up 24p to 543p.

Volume was relatively robust at over 968m shares changing hands by the close of trade.

But the turnover was inflated by 165m shares changing hands in Queens Moat after the Banque Nationale de Paris sold its 17% stake in the hotels group. Queens Moat shares were up 4p to 36.5p.