A rebound in technology, media and telecom stocks (TMTs) helped the UK market end the week, and start the new month, on a more positive note. Both the Dow Jones Industrial Average and the Nasdaq Composite closed sharply lower on Thursday. But there were signs early yesterday that both would open higher and that duly was the case when Wall Street started to trade. The Nasdaq quickly achieved a triple digit gain.

The Techmark 100 pulled out of the nosedive that took it on Thursday to the levels reached when the forum was founded in November 4th, 2000. By the close, it had gained 126.9 points to 2,594.73, although that still left it less than half the all-time high it recorded in March.

Eight FTSE 100 stocks gained more than 10 per cent on the day, including seven from the technology and telecom sectors. The eighth, South African Breweries, was pushed higher on bid speculation. In the 250 index, former tech favourites such as Orchestream and Surfcontrol also showed strong advances.

But these gains in TMT stocks were mainly achieved at the expense of the recently popular old economy groups Sainsbury, Glaxo Wellcome and Reckitt Benckiser were the three worst performers in the Footsie. That meant the gains for the main indices were fairly modest. The FTSE 100 index closed 28.2 points higher at 6,170.4, after a high of 6,189.9. That left the blue chip benchmark 2.5 per cent down on the week.

The 250 index rose 43.2 to 6,463.1, cutting its loss on the week to 1.5 per cent, while the SmallCap gained 27.6 to 3,228.4, for a decline of the week of 1.1 per cent. And even the Techmark's recovery still left that index down 5.5 per cent on the week. Economic issues were outshone by sectoral movements yesterday. The UK purchasing managers' index for November showed a rebound over 50, indicating that manufacturing activity is growing.

"Overall, this survey suggests that hopes for an early cut in UK base rates are likely to be misplaced," said Michael Saunders, UK economist at Schroder Salomon Smith Barney. "We expect UK rates to be on hold in the next six months, even with the Fed likely to cut."

In the US, the National Association of Purchasing Management index showed a further fall, creating further hopes that the Federal Reserve would be able to cut interest rates in 2001.