The London equity market was rampant yesterday, with the FTSE 100 index driving ahead to challenge the 5,000 level and hitting new intra-day and closing highs.
Once again, the banking and pharmaceutical sectors powered the market's rise, but there was plenty of help too from Wall Street's seemingly relentless advance. The Dow Jones Industrial Average passed 8,000 in early US trading.
A long list of UK and US economic news provided no downside shocks for either market; on the contrary, news of a fall in unemployment, plus a smaller than expected increase in underlying average earnings, were viewed as encouraging for sentiment in London.
In mid-afternoon, Footsie was tantalisingly close to 5,000, reaching an intra-day high of 4,991.8, up 92.5. By the close, the gain had slipped to 64.9 points but the index still set a closing record of 4,956.9, and extended its sequence of winning performances to six straight sessions. The last three trading days have seen the leading index race up 164.7 points or 3.7 per cent.
The other FTSE indices were left floundering in the wake of the FTSE 100's advance. The FTSE 250, although up 36.0 at 4,487.5, remains well short of its all-time high. And the FTSE SmallCap continued to under-perform, ending the day 1.4 down at 2,203.8. The SmallCap reached an intraday peak of 2,375.2 back on March 12th.
The FTSE All-Share index powered ahead to finish 26.2 up at 2,316.03.
Dealers said Footsie "looks set to break through the 5,000 level today, given a reasonable performance by the Dow".
The head of marketmaking at one big London-based securities house said: "There is no stopping this market yet; there is a shortage of the good quality stocks that overseas fund managers want to buy; that is enough to get London through 5,000 and beyond."
He insisted that the recent takeover and merger talk had played only a minor part in the market's decisive upward move in recent sessions. "That obviously helped to get the market moving, but it is the build up of liquidity, from home and abroad, that has been behind the surge," he said.
The expiry of the July series of stock options was cited by some as adding to the upside pressure, but that story was played down by senior marketmakers. The September Footsie future powered past the 5,000 mark.
London was just one of a host of European stock markets, including Frankfurt and Paris, making rapid progress yesterday.
