STOCKS gave another powerful display yesterday, shrugging off the worrying implications of the latest domestic economic news.
Investors preferred to focus instead on the likelihood of more takeover activity developing in the wake of this week's burst of bids. These have included hostile moves against Newman Tonks, Burnfield, Clyde Petroleum and London Electricity, with a total value of over £2.5 billion sterling.
Heavy trading volume was another feature. There was evidence of further programme trading activity yesterday, with at least one programme - weighted on the buy side and heavily loaded with banks and insurances - put through the market. Wednesday saw two programmes executed.
Turnover was additionally lifted yesterday by a long list of bed and breakfast, or tax-related, trades, which accounted for at least 100 million shares. At the 6 p.m. calculation, turnover in equities totalled 1.1 billion shares, the highest daily total for some months. Non-FT-SE 100 business accounted for 56 per cent of the overall figure. Customer trading activity in Wednesday was valued at £1.19 billion, the highest for five trading sessions.
Yesterday's economic news, which showed M4 money supply up 10.8 per cent in the year to November, came in above the consensus; many economists now see interest rates as almost certain to be lifted in the next couple of months.
Today promises plenty of action in global markets with numerous big derivatives expiries expected to promote intense activity. A double witching takes place in London, with expiries of FT-SE 100 index options and futures taking place between 10 a.m. and 10.30 a.m.