A good opening by Wall Street, ahead of the US Federal Reserve's open market committee meeting, lifted London's equity market yesterday afternoon. At the finish of an erratic trading session, the FTSE 100 was finally 40.6 ahead at 6,206.4. The broader FTSE All-Share index gave up good early gains and posted a minor fall over the lunchtime period, only to rally strongly later in the day to close a net 15.24 firmer at 2,887.91. The FTSE 250 index managed a minor 5.5 gain at 5,706.7, but the FTSE Small-Cap was never able to shake off the effects of persistent selling pressure and ended 6.4 down at 2,556.9.
On the British economic front, there was a warm welcome for the April consumer price index data, which showed headline inflation at 1.6 per cent year-on-year and core inflation dipping back below the government's 2.5 per cent target to show a 2.4 per cent increase year on year.
Adding some spice to the day's events was the revelation that Allied Domecq has been the target of Warren Buffett's Berkshire Hathaway, which has accumulated a 2.2 per cent stake in the drinks group. Allied shares spiralled upwards, topping the FTSE 100 performance table with the market adopting the view that Mr Buffett would substantially increase his stake. Turnover in equities picked up strongly from Monday's 856.1 million, reaching 1.1 billion by 6 p.m.
