There was no rejoicing in London's Stock Market yesterday as all the main FTSE indices built solidly on the better trend that developed towards the end of last week. But there was a widespread feeling of relief that the weekend brought no further shocks.
The latest developments in the Middle East were deemed marketfriendly, with dealers hoping for good news from the summit and crude oil prices stabilising after hints from Saudi Arabia about higher production.
Dealers pointed out that the recent steep decline in London had never been accompanied by any really heavy selling by the big global institutions.
"The weakness in the market has never really been matched by big selling volume. Broker commissions will attest to that," said one.
At the close, the FTSE 100 was 76.1 higher at 6,285.7, a rise which extended its gain over the past three trading sessions to 168.1, or 2.7 per cent.
The more junior indices also joined in the recovery party, with the 250 index up 74.2 at 6,478.9, the FTSE SmallCap 25.9 higher at 3,251.1 and the Techmark 100 30.9 firmer at 3,447.04.
The all-encompassing FTSE All-Share index moved back above the 3,000 level to finish at 3,007.41.
Commenting on recent developments in the market, the UK strategy team at Credit Suisse First Boston (CFSB) said there were three reasons behind its decision to recommend overweight positions in the IT sectors.
First, IT stocks would seem to have very little cyclical exposure due to the lack of PC or semiconductor manufacturers in the UK. Secondly, the broker said, "with earnings in the broader market suffering from cyclical or pricing power-based downgrades, we believe that investors should be increasingly willing to pay up for exposure to high-quality growth".
Finally, CSFB said, the news flow for many of these companies looks set to improve.
Overall, CSFB said: "The global landscape is likely to remain difficult for equities in the months ahead, but we do not foresee the sort of late 1998 crisis that many assets are now discounting. We see the upper end of the 6,000 to 6,800 range as the right area for a year-end target."
Turnover in equities came out at 1.67 billion shares, led by another big day in Vodafone stock which, at 254 million shares traded, accounted for 15.2 per cent of the total.
