A HEAVY trading programme, weighted to the sell-side - said to have been executed by Merrill Lynch - took much of the shine off the latest advance to record intra-day and closing highs by the London market yesterday.
Although all the top indices closed well below their best levels, they nevertheless managed to record all-time closing highs for the sixth straight session, hitting intra-day peaks on the way.
The FTSE 100 index settled 6.9 ahead at 4,444.3, having rushed up to 4,466.3 in the first flush of exuberance yesterday morning.
The FTSE Mid-250, meanwhile, only just managed to stay in positive ground, finishing 0.2 firmer at 4,729.4, well off the day's high of 4,736.2.
The SmallCap put on the strongest showing of the day, ending 4.8 to the good at 2,370.9, only a fraction below its intra-day peak of 2,371.0.
Earlier, it was "all systems go" with market-makers having to hoist their opening levels in response to Wall Street's seemingly relentless march towards its next goal - 7,100 on the Dow Jones Industrial Average.
Fuelled by yet more talk of imminent takeovers or mergers plus another set of reassuring company reports, the big institutions continued to pile into equities, frightened to miss out on the surge in global stock markets.
Talk of sizeable rights issues was also doing the rounds.
Dealers said it was becoming increasingly obvious that market-makers were having to bid aggressively for stock to replenish their trading books after each upward move by Wall Street exposed short positions adopted the previous day.
"Market-makers do not want to go home either too long or toe short of stock in such dangerous markets; the idea is to job off a level-to-slightly-short book," said one dealer.
The day's big stories were concentrated mostly in the drug stocks, where Glaxo Wellcome built on Monday's rally and hit another closing record after good news on one of its new drugs.
On the downside, Zeneca tumbled after a strong start, humbled by a flurry of profit-taking despite excellent results. Biotech stock Scotia saw its shares plummet after disappointment involving its diabetes treatment.
The strategy team at Nat West Securities said it was concerned that the market had "run too far in the short term", but the NatWest team stressed these were all short-term worries which would have eased by the end of the year, allowing the bull market to reawaken.
