PUBLICATION of the Scott report into the "Arms for Iraq" scandal was greeted with sighs of relief around the City's trading rooms. The report, which has cast a shadow over British markets for some time, was viewed by market observers as not as damaging to the government as had been feared.
The relief over the Scott report, coupled with more good inflation news, confirmation of Rentokil's interest in bidding for BET and a dawn raid on Yorkshire-Tyne Tees Television by Granada, helped share prices surge.
Such was the market's enthusiasm, that the FTSE 100 index came within 1.5 points of its all-time closing high and 2.8 of its intra-day peak.
Buying interest was not confined to the leaders; the second liners, which have outpaced Footsie in recent sessions, made renewed progress, with the FTSE Mid-250 index climbing 27.4 to a new peak of 4,189.1.
Dealers said recent fears that the March reporting season would bring a series of disappointments had also been overplayed.
there was also a growing expectation among market-makers that March could bring another round of global interest rate cuts.
Bank stocks advanced strongly after encouraging results from Cheltenham & Gloucester, the building society acquired by Lloyds TSB, and National & Provincial, now controlled by Abbey National. Lloyds TSB reports preliminary figures this morning. Composite insurances brushed aside a number of downgrades closing sharply higher on the session. The best Footsie performer was Ladbroke, long viewed as a potential target for Bass.
Turnover reached 906.7 million shares, which should see the value of customer business top £2 billion sterling. Wednesday's retail activity was worth £1.97 billion sterling.
