Buyers reappear to take Footsie out of doldrums

It was four winning performances on the spin for the FTSE 100, 250 and All-Share indices yesterday, with big gains for the SmallCap and TechMark 100 for good measure, as the London market's rehabilitation continued. The latest return of confidence in equities came in the wake of another comforting performance from Wall Street overnight and again at the outset of US trading yesterday.

A combination of those factors, plus the tense situation in the Middle East and the weakness of the euro, triggered the recent slide in global markets, London included. But as has happened so frequently in recent months the latest sell-off in London, which drove the FTSE 100 index down to 6,017 at its worst last week, brought out the buyers who always appear whenever the 100 index approaches the bottom end of its long established trading range. The index has been locked in a 6,0006,800 range for much of the period since early 1999.

At the finish of a busy trading session the FTSE 100 was comfortably above the 6,400 level, up 122.5 at 6,438.4, extending the rise over the last four sessions to 290.2, or 4.7 per cent. Telecoms provided four out of the top five winners in the 100 index.

There was no doubting the star performer among the indices though. The TechMark 100, battered in September and early October by the US technology sector's profit warnings, shot up 114.8, or 3.3 per cent, to 3,541.25, only just short of the day's best. The FTSE 250, meanwhile, accelerated 46.0 to 6,564.1, and the SmallCap rallied to end the day 27.2 up at 3,274.2. The all-embracing FTSE All-Share index settled 52.26 up at 3,073.83.

Only minutes after the London market closed for the day, the Dow Jones Industrial Average was 167 points higher, and well clear of the 10,000 level, while the Nasdaq Composite was 25 points ahead.

Earlier in the day the big gains in TMTs were complemented by exceptional rises in the other leading areas of the market, the oil majors and pharmaceuticals. The last two areas of the market are both big favourites with US investors who were out in force on Wall Street yesterday.

Specialists continued to point to the dramatic developments in the auction of Italy's third generation of mobile phone licences, which saw the BT-led Blu consortium pull out on Monday. Telecoms companies face much smaller bills as a consequence. Some strategists remain sceptical of the market's ability to carry on its recovery, with one insisting that the TMTs "are still overvalued don't chase them".

Turnover in equities was a respectable, but unremarkable, 1.7 billion shares.