The FTSE 100 index took another substantial step towards its previous all-time highs yesterday, shrugging aside a near three-figure decline on Wall Street overnight and responding to another influx of institutional cash and a strong opening by the US stock market. Sentiment in London and the rest of Europe was lifted by generally positive performances by the Asian markets, with Tokyo standing out. However, dealers insisted domestic fundamentals played the main part in London's surge.

The prevailing theory was the "weight of money" argument. As one market observer put it: "The institutions are full of cash which has to find a home. Asia is being ruled out for the obvious reasons. Continental European markets have outperformed London over the past year or so, as has Wall Street and both are seen as overvalued - which leaves the UK."

Footsie ended a session featured by much-increased turnover, with a net 97.3 gain at 5,263.1. That rise left the index up 124.8, or 2.4 per cent, over the week. Burdened by its large content of poorly performing retailers and engineers, the FTSE Mid-250 index finished the session 3.7 lower at 4,812.6. Unlike the FTSE 100, the 250 index has come under sustained pressure all week, dropping 52 points, or just over 1 per cent, reflecting worries about the Asian turmoil. The FTSE SmallCap, which like the Mid-250 index ran into pockets of selling during the early part of the week, picked up yesterday, ending the day 6.0 higher at 2,356.0, and up 7.82 over the five-day period.