THE FT-SE 100 index hit a new peak yesterday as dealers shrugged off a Europe wide computer crash and concentrated instead on Wall Street's record close.
On Tuesday, the Dow Jones Industrial Average jumped 70 points in the last hour of trading, with half of those gains coming from two stocks - Philip Morris and Procter & Gamble.
Consequently, there was pressure on the UK market from the beginning, and on tobacco and pharmaceutical stocks in particular. However, for the first hour of trading, the Reuters system used by brokers and fund managers to check prices was not working.
Dealers added that, for a further two hours, the system was wrestling with the need to catch up with the lost information and unable to provide accurate prices.
"We had to go back to the old system of getting prices by talking on the phone to marketmakers who tend to have their own in house systems," said Mr Mike Butler of Panmure Gordon.
A spokesman for Reuters said afterwards: "There was a failure of one of the computer systems that processes some of the European exchange information data. We were back in business by midmorning.
That early problem stowed down customer business for a while. It also overshadowed the latest retail sales data which came out higher than most strategists had forecast.
Sales were up 4.6 per cent year on year in January in volume terms - the highest growth rate for seven years. Adding to potential interest rate worries were the minutes of the latest meeting between the Chancellor of the Exchequer. Mr Kenneth Clarke and the governor of the Bank of England, Mr Eddie George, which showed the latter continuing to argue for a rise.
Government bonds slipped back but equities remained unruffled. Most strategists have decided that interest rates are on hold until after the election.
While the initial rise in stocks was checked briefly, Footsie recovered to end the day 25.1 up at 4,537.4, some four points above its previous peak.
The leading index was helped by a strong performance from stocks such as BAT Industries, Smith Kline Beecham and Glaxo Wellcome, in the wake of the gains from Procter & Gamble and Philip Morris. There was also some speculation about consolidation in the media sector. Meanwhile, the FTSE 250 improved 7.7 to 4,620.4 and the SmallCap 3.0 to 2,346.4. Despite the trading hitch, turnover by 6 p.m. was 930.5 million shares with Centrica, BAT, Hanson and Asda accounting for more than 10 per cent. It was up from Tuesday's 884.5 million, when retail business was worth £2.35 billion sterling.
