MARKS & Spencer failed to convince investors that it was back on track as its shares suffered a sharp reversal following its latest trading update.

The stock initially rose 3% but later swung 3% lower to lead the blue-chip fallers' board despite a 0.6% rise in underlying clothing sales in the quarter to March 29.

The wider FTSE 100 Index also surrendered early gains which had seen it 50 points ahead to finish the session just 6.4 points up at 6642.

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Confidence was earlier boosted by Federal Reserve minutes showing that policy-makers wanted to be absolutely certain the US economy was on the recovery path before starting to raise interest rates.

As expected, the Bank of England kept interest rates on hold at its monthly meeting, with economists confident that there will be no change until next year.

In a sign of improved confidence, Greece tapped the international bond markets for the first time in four years by issuing a five-year bond.

The country, locked out of the market by high borrowing costs since 2010, moved to raise 2.5 billion euros (£2.1 billion) in the sale.

But the buoyant mood later faded away amid weak trade data from China and a renewed sell-off on America's tech-heavy Nasdaq index. Germany's Dax and France's Cac 40 were both in the red, as was New York's Dow Jones Industrial Average.

On currency markets, the pound held firm at 1.68 US dollars and 1.21 euros.

In London, Marks & Spencer's first rise in underlying clothing sales since the end of 2010 failed to offset worries over margin pressure and declining market share. Shares fell 14p to 442p.

Freddie George, a retail analyst at Cantor Fitzgerald, kept his sell rating on the stock yesterday and warned profits for the year to March 31 were likely to fall to as low as £610 million, compared with £665 million a year earlier.

Rival Next, which announced annual profits of £695 million last month, rose 75p to 6540p, while Primark owner Associated British Foods was 68p higher at 2671p.

Royal Bank of Scotland suffered a choppy day's trading despite taking a step towards returning to the private sector by agreeing to pay £1.5 billion to the taxpayer in a complex deal which will ultimately enable it to resume future dividend payouts.

Shares initially rose but later fell back 1.1p to 308.7p.

In a largely positive session for the retail sector, Mothercare jumped nearly 15% or 23.8p to 187p after it showed tentative signs of a recovery from its Christmas profits warning.

Underlying sales were 0.3% lower in the 12 weeks to March 29, against a 1.9% fall for the whole financial year.

The biggest FTSE 100 risers were Land Securities, up 29p to 1045p, and Associated British Foods up 68p to 2671p.