A DECENT set of corporate results, a continued recovery on Wall Street and some modest optimism about British interest rates combined to send the FTSE 100 index higher for the fourth consecutive trading session.
The August holiday season is in full swing and once again, turn over on Monday appeared to be sluggish. By 5 p.m., 477.4 million shares had been traded, of which 54 per cent was in non FTSE 100 stocks. The value of customer business on Friday was £1.83 billion.
Suddenly, however, between 5 p.m. and 6 p.m., a 666 million share trade was reported in Just Group, an AIM stock, lifting the 6 p.m. count for overall market volume to 1.2 billion shares. However, the devil appeared to have been at work, since the Just deal at 4 1/4, would have represented five times the company's market capitalisation at Friday's close.
In the real world, the FTSE 100 index managed a 17.7 point rise to 3788.7 and it has now risen 120 points since July 30th. The Mid 250 index, which has trailed behind Footsie in recent sessions, had a better day, rising 22.7 to 4288.4.
Figures from HSBC Holdings, the Hong Kong bank which owns Midland, and Pearson, the diversified group which owns the Financial Times, both came in better than expected and put the companies shares among the top three Footsie performers.
Mr Philip Isherwood, British strategist at Kleinwort Benson Securities, says: "With the institutions having lots of cash sitting on the sidelines, we think Footsie can end the year at 4000."
Yesterday's figures helped the London market overcome the effect of a number of stocks, including BT and Scottish & Newcastle, going ex dividend. Shares received a modest lift from Friday's close on Wall Street, where the Dow Jones Industrial Averaged notched up another 85 point gain.
Figures for manufacturing output and industrial production showed larger month on month falls than expected, raising hopes that the chancellor would push for "a further cut in base rates. Gills' took heart from the weak data, with the 10 year benchmark issue ending the session around an eighth of a point ahead. But other recent economic data have been quite robust and the Bank of England may argue, in tomorrow's inflation report, that rates may have to rise if the government is to meet its inflation target.
