City traders headed home for the Christmas break after Thursday's half-session left leading shares down after a morning in the doldrums.

After yesterday's five month high, London failed to react to Wall Street's powerful finish last night.

Although the Dow Jones Industrial Average ended just 1.8% shy of its all time closing high, the FTSE 100 Index of leading shares closed down 41.6 points at 5867.2.

This was well below the psychological 5900 mark which it easily breached in the previous session.

Trading was slow, with predictably few corporate announcements and little news on the international circuit.

But BP managed a 14.5p spurt to 916.5p on reports that its merger with Amoco was on track to be completed by the end of the year.

Reports showed that the telecoms industry has had the best year of any sector on the UK stock market but Vodafone and Colt Telecom failed to pick up on the news.

Shares in Colt dropped 22.5p to 925p, while Vodafone fell 23p to 970p.

Both fell to profit taking.

The biggest rising sector in Europe over the year was the life assurance sector.

But profit takers had their way with the life offices, leaving Prudential down 7.5p to 908p, Sun Life & Provincial down 9.5p to 512p and Legal & General down 15.5p to 772.5p.

Goldsmiths, the jeweller, sparkled 5p up to 169p after reports that chairman Jurek Piasecki was tipped to be putting together a management buyout.

Property group Caledonian Trust reported that trading was "very satisfactory". Shares jumped 5p to 45p.

Recruitment company Spring jumped 28% - by 31.5p to 146.5p - following a "strong buy" recommendation from a broker.

Eyecare Products gained 2.5p to 14.5p - a 21% jump - after dealers focused on last night's announcement that it was being taken off the market in a takeover by sportswear group Kappa.

Leisure group Vardon fell 9p to 137.5p following a late announcement yesterday of the £47m sale of its 23 Sea Life centres and the London and York Dungeons.

IT stocks jumped following strong gains in the sector in the US.

Misys jumped 23.75p to 447.5p, Parity improved 18p to 560p and MSB International soared 27.5p to 310p.

IT recruiter MSB was still being helped by a positive trading statement last week.

A downbeat sales update from non-listed John Lewis Partnership upset some retail stocks. Marks & Spencer ended 9.75p down to 408p, Bentalls lost 4p to end at 73.5p, Kingfisher ditched 4p to 642p and Asda lost 3.25p to 159.5p.

Positive sentiment fizzed in the drinks and brewery sector with Diageo up 13.5p to 701.5p, Scottish & Newcastle up 3.5p to 708.5p and Morland up 4p to 361.5p.

The main fallers were Billiton down 4p to 120p, Halifax down 28p to 850p, Rio Tinto down 20.5p to 691.5p, Centrica down 3p to 117p and Colt Telecom down 22.5p to 925p.

Risers were Diageo up 13.5p to 701.5p, Stagecoach up 4.5p to 254.5p, BP up 14.5p to 916.5p, Hays up 6p to 483p and Williams up 3.25p to 343p.