The Wednesday session in London was dominated by the wait for news from New York on US interest rates.

The FTSE 100 index of leading shares inched up as the market regained its stability after Tuesday's fall.

The benchmark index closed up 11.4 points at 6318.5.

The bid battle for Allied Domecq's pubs and off-licences took centre stage.

Whitbread shares were one of the FTSE's biggest losers, down 36p, or 3.5%, at 983p.

Investors appeared to take the view it will lose the battle with Punch Taverns for Allied Domecq's outlets.

Allied Domecq shares edged up 1.5p at 612p.

Fellow brewer Bass gained 4.8% after an upbeat report from analysts into the sector.

Provisional volume was 1.1bn shares traded.

Elsewhere, positive sentiment continued to underpin the gas retailer Centrica, which closed up 5p, or 3.5%, at 149p.

An analyst said he expects the purchase of the Automobile Association to be announced before the end of the week.

Security and alarms specialist Williams came back to life after the recent dive in the share price reignited hopes of a successful bid from Tyco International.

Pharmaceuticals enjoyed a positive session, tracking sector gains on Wall Street on Tuesday, after details of President Clinton's Medicare program touched on a prescription-drug benefit without mentioning price controls.

Glaxo Wellcome shares added 43p to 1763p and SmithKline Beecham put on 14p to 824.5p.

Tobacco issues continued to feel the heat from US group Philip Morris' profit-warning on Monday.

Imperial Tobacco was the worst hit, down 25.5p, or 3.6%, at 692p.