Equities deliver another powerful performance

London's equity market delivered another powerful performance yesterday, with all the main indices making further rapid progress, although best levels were not always held, particularly in the case of the FTSE 100.

It did look increasingly as if the FTSE 100 had at last broken decisively out of its recent trading range, as the index once again passed through the 5,300 mark. Only this time it held above that level all day apart from a few minutes at the start of trading.

There were various driving forces behind the market's latest upsurge. A number of traders said the prime motivation was the hope of economic recovery, because of the moves by central banks to cut rates aggressively and also because of the recent slide in crude oil prices.

Another factor, one salesman insisted, was the wall of money argument. "There is a build-up of institutional cash and fund managers are terrified of missing the boat," he said.

The market's continued upwards spiral brought with it substantial turnover, which, at the 6 p.m. cut-off point reached three billion shares, well ahead of usual levels of activity on a Monday.

There were special factors at work, including huge activity in MMO, newly demerged from BT. The start of unconditional trading in the stock, and its inclusion in the FTSE 100, saw the shares chased higher. BT Group was also supported.

The 100 index eventually settled a net 47 up at 5,338, its highest closing level since September 4th, the week before the terror attacks were launched on New York and Washington.

While the 100 index attracted frequent pockets of profit-taking, particularly in the more defensive sectors of the market such as the utilities, the more junior indices were rampant, closing not far short of their best levels of the day.

Pride of place went once again to the resurgent Techmark 100 index, which posted its fifth straight gain, climbing another 36.04, or 2.2 per cent, to 1,653.83, after 1,663.17.

Since hitting a record low of 1,064.98 on September 21st, the Techmark 100 has rallied a massive 588.85, or more than 55 per cent, as the TMT stocks recovered from the mangling that followed the TMT bubble of late 1999 and early 2000.