In a surprisingly vibrant start to what was expected to be a week of winding down before the Christmas break, the London stock market made further rapid progress yesterday.
Posting its fifth straight winning performance, the FTSE 100 index raced through the 5,800 level, settling a net 134.6 or 2.3 per cent higher at 5,876.5, a rise over five sessions of 342.
"It looks as if the traditional pre-Christmas run, which most people in the market had already factored into prices, hasn't really finished," said one salesman.
And the big gains were not confined to the market leaders, unlike recent performances that have seen the big global institutions chase the UK market's front-line stocks.
The FTSE 250 index, which showed a marked reluctance to make progress during the early part of the session, subsequently picked up speed to finish the day 31.7 ahead at 4,742.9 its fourth straight gain while the FTSE SmallCap closed at a session high of 2,022.5 up 6.5.
Marketmakers on London's trading desks were generally surprised at the pace and power of the upsurge across Europe and the US, but they all agreed Wall Street was providing the real backbone.
The market's early good showing came amid another burst of actual and rumoured takeover stories, with the main thrust centred on the defence/aerospace arena where GEC and British Aerospace were aggressively bought on the view that a Europewide restructuring is not far away.
Takeover talk also encompassed the retail area, where Asda, the supermarket giant, made rapid progress amid persistent stories that Wal-Mart, the US retail group, might be about to move into Britain. Wal-Mart bid stories also impacted on MFI, the furniture group.
