There may not have been many of them but the traders and investors who put in an appearance in London's stock market yesterday had obviously enjoyed a good Christmas.

The mood of optimism that drove the market higher in the two sessions before the Christmas break was extended to a third straight day with all the main indices making good progress and the FTSE 100 index, London's benchmark, re-crossing the 5,200 level for the first time since December 7th.

The FTSE 100 closed the session a net 35.8 up at a day's high of 5213.2, for a three-day rise of 133.0, or 2.6 per cent. It was the same story for the FTSE 250 and the FTSE SmallCap with the Techmark 100 adding 9.39 at 1,454.42. But while the market enjoyed good gains, it was clear that genuine investment activity was down to minimal levels, with turnover shrinking to only 500 million shares by the 6 p.m. cut-off, about a quarter of the amount traded on a generally quiet day in the market and a far cry from the 2.5 billion plus levels of business on busy days.

Once again the main driving force behind the London market's latest advance was Wall Street. One of the few bearish developments of the session was the marked weakness of gilts, which took some of the shine off the equity market. The 10-year gilt was down more than a full point and the 20-year gilt was down more than two full points amid concerns that the continuing high level of retail sales could trigger the end of the sequence of domestic interest rate cuts and drive rates higher.

Ironically, it was retail that was among those sectors that had a restraining effect on the market, despite the latest evidence of booming high street sales.

Explaining the sluggish performance of the retail stocks, dealers said the sector had been outperforming for some time and that much of the good news had already been priced in.

That evidence came from the John Lewis Partnership, which revealed an 8 per cent increase in sales in the week to last Saturday. And Goldsmiths, the privately owned jewellery retailer, reported record sales in the four weeks to Christmas Eve.

Although the sector closed off its lows, Kingfisher was down 61/4 at 386p and GUS eased slightly to 6361/2p. Next retreated 5 to 885p. Marks & Spencer, one of the best performing stocks in the top 100 this year, finished the day 31/4 higher at 3603/4p.