London's equity market swung modestly in both directions yesterday and was unable to pick up a decisive trend for much of the session, before Vodafone drove it ahead during the last half hour of trading.
The market's indecision for much of the day reflected the proximity of two of the most important events of the year: the outcome of the US presidential election and the pre-budget report of Mr Gordon Brown, Chancellor of the Exchequer.
Rather surprisingly, the closeness of the two events did not choke off stock market activity. On the contrary turnover, which has begun to pick up in the past couple of weeks, approached the two billion shares mark, eventually reaching 1.88 billion shares.
There was plenty of corporate news to keep the pot boiling. It was mostly an "old-economy" day for the market with the overnight surge in the Dow Jones Industrial Average.
In London, there were signs of switching and sector rotation out of many of the "new-economy" areas of the market, although Vodafone Group, the UK's biggest company, staged a decent rally after its recent setbacks to finish top of the FTSE 100 performance table. Vodafone's gain alone was worth over 37 FTSE 100 points.
British Telecom was another winner, despite news that Merrill Lynch had chopped its price forecast to £8.50 from £11.50 ahead of the group's interim results, which are due tomorrow.
Marks and Spencer, the UK's biggest retailer, confirmed the market's worst fears about falling sales, revealing that the first five weeks of trading in its second half had seen overall sales slide more than 8 per cent. But its shares shrugged off the bad news, along with a dip in interim profits, by telling the market it was maintaining the dividend and that it expected an upturn in fortunes next year. Another supporting factor was the prospect of a share buy-back of 10 per cent of the capital.
At the close, the FTSE 100 was a comfortable 35.9 higher at 6,466.9, its best of the day, having fallen 24.5 to 6,406.5 in mid-morning, when the market was fretting about the possibility of another sell-off in US tech stocks later in the day.
Of the other main indices, the FTSE 250 dipped 21.69 to 6,805.11, having threatened to slide back below 6,800 at one point. The FTSE SmallCap managed a minor gain, finishing 5.23 firmer at 3,354.53, but the Techmark 100, burdened by marked weakness in Colt Telecom, Bookham, Spirent, Energis and Celltech, dropped 36.36 to 3,462.15.
Dealers said the overall expectation in the market was that Wall Street would be happier with a divided US government than a blanket victory by one party. Of the pre-Budget report, the recent spate of leaks meant they anticipated few surprises.
