Shares in London staged their biggest ever one-day rise on Monday, with a 214.2 point climb to 5037.6.
But smaller company shares failed to keep pace, the FTSE Small Cap Index adding just 9.8 points to 1844.3. And on Tuesday the main index fell 80 points in early trading after a miserable day in Asia. By mid-morning it recovered slightly to 5012.0, down 25.6.
Engineers, however, continued to buck the trend, adding to the increases achieved across the sector last week.
With the pound still falling against the deutschmark and big fluctuations between the yen and the dollar, the sector is coming slowly back into favour, analysts said.
One of the biggest risers was British Aerospace, up 35p to 391p amid rumours that it is planning a tie-up with Daimler-Benz an idea hotly denied by both companies.
BBA Group rose 6p to 347p after a recommendation from Panmure Gordon, while improved broker sentiment took Vosper Thorneycroft up 22p to 588p.
Mayflower, which has the upper hand in its bid to buy Midland chassis maker Dennis, rose 3p to 122p. TT Group acquired a 1.377% stake in Delta, helping it to rise 24p to 130p.
Racal Electronics fell 4p to 308.5p, despite a £26m contract to supply the British Army and Royal Marines with a warfare communications system.
Cobham jumped 20p to 772.5p, while IMI was 26.5 stronger at 272p.