FAVOURABLE movements within global currencies and a bounce on Wall Street provided a benign environment for London stocks.
Nevertheless, the FTSE 100 index reacted more cautiously than its European counterparts. Germany's real time index was up more than 3 per cent while France gained more than 2 per cent. But the Footsie held on to pre election caution and rose less than 1 per cent.
Initial impetus for yesterday's bounce came from Friday night's revival on the Dow Jones Industrial Average, which ended that session 48 higher following an 8 per cent correction in the past few weeks.
Then, the US dollar hit its highest level against the Japanese yen for four years.
Dollar strength took some of the pressure away from the Britain's big overseas earners and helped Footsie to start the day almost 19 points up on Friday's close.
And while the pound hit its highest level against the deutschmark since leaving the ERM in 1992 the rise was prompted by the deutschmark's weakness against the dollar, not sterling strength.
Only three big companies - Pearson, P&O and Unilever - went ex-dividend and the impact on the blue chip index was just 2.5 points - small by recent standards.
Finally, there were no economic figures to worry about and, in Burmah Castrol, only one big company result.
So, to continue the recent trend, trading volume was light and any moves upwards largely reflected an absence of selling as opposed to committed buying.
Furthermore, the performance of the second line indices underlined the international, rather than domestic, basis for the rise. The FTSE 250 closed only 3.6 higher at 4,518.4 and the Smallcap 2.0 up at 2,284.3.
Footsie, on the other hand, ended the session near its high of the day with a net rise of 35.1 to 4,271.7 as Wall Street gained almost 50 points during the last hours of the London session.
Nevertheless, most market makers are preferring to keep their powder dry at least until after the general election on May 1st. Overall turnover was only 680.5 million shares by 6 p.m.
While Sunday newspapers generated some caution with comment about global crashes and the end of the cyclical bull run, there was also talk of a `last market hurrah.
Mr Robin Griffiths, HSBC James Capel's chartist, believes that although the cycle is drawing to a close, an incoming Labour administration would have a golden period which would see Footsie move up to 4,500 and "conceivably 4,600".
"Footsie has risen 50 per cent since January, 1995. On average, a bull market lasts 32 months and we're getting there but I am expecting Mr Blair to get a bit of a honeymoon period," he said.
Mr Bob Semple of NatWest Securities is even more optimistic: "Continued dividend growth, lower gilt yields by the year end, high levels of liquidity and undemanding valuations will push the equity to new highs at the end of the year."
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