It was very much a new economy day for London's equity market yesterday, with the Techmark 100 leading the indices pack after Monday's strong performance in New York by the tech-heavy Nasdaq Composite.
But although the other FTSE indices were outpaced by the Techmark 100, they managed to record good gains across the board.
The Nasdaq pushed up 128 points on Monday. And the good feeling in the US market extended to the Dow Jones Industrial Average which also recorded a three-figure gain. But it was a different story in the US market yesterday when the Dow registered an early three-figure dip and the Nasdaq struggled to keep its head above water.
The FTSE 100 finished the day a net 36.7 higher at 6,526.9, having peaked at 6,536.5, while the FTSE 250 gave a solidly impressive performance to close 30.6 ahead at 6,587.0. The Techmark 100 climbed 101.0 or 3 per cent to 3,459.22.
Markets in London and New York are still being driven by expectations that both the UK and the US could be at or near to the top of the interest rate cycle.
The rate outlook will be made much clearer next week after the meeting of the US Federal Reserve's Open Market Committee, with a decision expected at 7.15 p.m. London time on Wednesday.
Yesterday's UK economic news was mostly market-friendly. The public sector net cash requirement for May showed a surplus of £12.1 billion sterling, ahead of the consensus forecast of £11 billion and the market was unmoved by the M4 money supply and lending data.
Further evidence of a cooling in the British housing market was viewed as adding to the growing view that British interest rates are at a cyclical peak.
While not expecting the FTSE 100 to stage a decisive breakout from its trading between 6,000 and 6,600, at least in the short term, some brokers are adopting the view that the market is underpinned by the old economy stocks which many consider still offer good value.
Turnover in equities remained low, and was once again affected by sporting distractions. At 6 p.m., turnover was 1.35 billion shares, with many traders leaving early to catch the England v Romania game.
A flurry of international and domestic takeover stories provided plenty of interest around the various sectors. The Vivendi/Seagram/ Canal Plus merger provoked an early rush for media and entertainment shares such as Pearson, although the early rise in the stock quickly ran out of steam.
The Publicis bid for Saatchi & Saatchi continued to boost the advertising sector, while there was some much-needed positive news for shareholders in Eidos, the computer games company, which said it had received a bid approach.
