London's equity market was set on fire by the shock news of another cut in US interest rates yesterday. The news capped a highly positive session in which some much-needed reassurance from Intel and the minutes of the most recent meeting of the Bank of England's monetary policy committee had already started to revise sentiment.

The FTSE 100, which posted a three-figure gain even before the US rate news, sprinted ahead to top the 5,900 level, hitting 5,902.6, before dipping off to close a net 129.1, or 2.2 per cent, higher at 5,890.2. Even more startling was the stratospheric rise in the Techmark 100 with a 147.1, or 8 per cent, gain at 1,984.23.

The Footsie was pulled higher by a sudden acceleration in the Dow Jones Industrial Average and the Nasdaq Composite. The latter recrossed the 2,000 mark, clambering up more than 9 per cent in the process, while the Dow jumped over 400 points, as London closed.

The US interest rate news came out of the blue and was described by a senior market maker at one of the big US investment banks as "ranking 10 on the Richter scale of stock market shocks". While acknowledging that rate cuts are historically good news for markets, he said the latest cut "had to be made from weakness and it is the extent of the weakness that worries everyone; the next couple of trading sessions will be very interesting", he said.

Even before the "bolt from the blue" US story, London had been enjoying big gains across the board. TMT, so brutally treated on Monday in the wake of the grim news from Cisco, led the charge.

Initially invigorated by the Intel news, London was given a further shot in the arm as the minutes of the April 5th meeting of the Bank of England's monetary policy committee revealed that no fewer than three of its members had voted for a 50 basis points reduction in domestic interest rates. UK rates were reduced by 25 basis points after the meeting. A further reduction in UK rates after the next meeting of the committee is now being seen as highly likely.

The TMT grouping provided 15 out of the top 20 performers in the FTSE 100, with computer-related stocks, such as ARM Holdings, especially boosted by the Intel news. And it was tech stocks that headed the FTSE 250 and SmallCap indices too.