The improvement in sentiment surrounding TMT stocks towards the end of last week was apparent again yesterday as the London market responded vigorously to bullish news affecting Vodafone AirTouch and Freeserve/Dixons.
Wall Street gave the market an additional thrust as the Dow Jones posted an early three-figure gain and the Nasdaq matched it.
"It has been most definitely a new economy day for the market, mostly triggered by stock-specific stories, and it will be interesting to see if the better feeling in these things runs on," said one senior equity salesman.
"At the moment the market feels in good condition, but we've got some crucial economic numbers coming from the US starting tomorrow and that could change everything," he said, in a reference to the nonfarm payroll report due on Friday as well as the Chicago purchasing managers' index and the national purchasing managers' data expected today and tomorrow.
A mixture of bad news from the telecoms, media and technology sectors the failure of Boo.com and the high price paid for the third generation of UK mobile licences coupled with worries about more interest rate rises in the US, had undermined the tech-related indices in recent weeks.
At the finish of a session of surprisingly vigorous activity in the market the return to work after bank holidays tends to bring sluggish business the FTSE 100 had burst through the 6,300 level and at one point looked like attacking 6,400, before ending the day a net 142.7 up at 6,359.6. That was its best closing level since May 2nd.
Even more encouraging for the market bulls was the extent of the positive feeling which ranged from the leaders right down through the second ranking stocks and the smallcaps.
The FTSE 250 moved up 56.4 to 6,194.1, while the FTSE SmallCap closed 12.7 better at 3,169.0.
But the best performance came from the Techmark 100, which drove up 135.2 to 3,143.34, extending its gain over the past three sessions to 279.11, or just short of 10 per cent.
Sentiment in London was positive from the outset, with the market registering its enthusiasm over the long-expected news of the takeover by France Telecom of Orange, the UK mobile phone group inherited by Vodafone AirTouch in its acquisition of Mannesmann. Analysts could barely conceal their excitement with the Vodafone developments, which were accompanied by top-of-the-range results. The gain in Vodafone shares accounted for a rise in excess of 60 FTSE 100 points by the close of trading.
