FTSE 100 Index: 3857.1 (+36.4); FTSE Mid-250 Index: 4534.5 (+40.9)
BRITISH shares continued their upward spiral yesterday with all the main indices racing ahead to new records.
The latest broad advance was fuelled by ever-present takeover speculation, a good showing by international bond markets which prompted a strong rise in gilts, and another rise on Wall Street.
Earlier in the day, the stock market had raced higher as the City's big securities houses became embroiled in the expiry of the FTSE 100 April index option which produced a flurry of exceptionally heavy trading in the option. It became clear yesterday that the recent upsurge in London has caught many of the big institutions on the wrong foot.
One market-maker said: "There is a feeling in the market that a lot of the big funds have been reluctant to chase London stocks during their strong run and they are now having to pay up to get their weightings right. They expected the market to correct sharply and are now 150 points wrong. It is a very painful exercise for them."
There was further evidence yesterday of more substantial programme trading activity. Goldman Sachs was said to have again been one of the biggest traders in the marketplace. The US investment bank, said to have been involved in programme trade business valued at anything up to £l billion sterling earlier this week, was still said to be operating the programme yesterday.
Another big programme, concentrated on the FTSE 100 and this time weighted on the sell side and estimated at around £100 million, printed out on the close of trading. Such was the pent-up market demand that the selling failed to produce much of a dent in the FTSE 100.
One of the features of the day's trading was the expiry of the FTSE 100 April index options in mid-morning. Opening at around five points higher, the FTSE 100 began to accelerate as the expiry took place, before easing off in the aftermath of a bout of intense activity in options, the cash market and the future.
Dealers said one of the big European securities houses was pushing the market aggressively at the expiry and one of the US-owned houses trying to drive the market in the other direction.
