London's equity market took its recovery process a substantial stage further yesterday, posting its biggest-ever points gain and rising 3.3 per cent. It responded to a much better performance by international stock markets complemented by encouraging domestic economic news.
Adding a further bullish touch to yesterday's proceedings was another flurry of takeover news, this time in the insurance arena, which helped to revive confidence in the financial stocks.
This sector has been among the worst affected by the second wave of Asian turmoil and the crisis in Russia that culminated in Monday's effective devaluation of the rouble and the 90-day moratorium on debt repayment.
And there were strong suspicions that another big takeover was being lined up. "If the rumoured bid does not materialise then we could be in a spot of bother; but there was most definitely some crazy buying in the future. The shorts have been carried out feet first today," said one weary market-maker.
The FTSE 100 ended with its best-ever performance in points terms, although only the ninth-biggest in percentage terms. It rose 181.0 or 3.3 per cent to 5,648.1, extending the rally over the past three sessions to 248.7 or 4.6 per cent.
The strength of the leading lights did not follow through into the rest of the market, however.
The FTSE 250 managed to record a rather meagre gain of 22.6 to 5,159.2, burdened, according to dealers, by a disappointing showing by many of the consumer/leisure stocks and especially by Thistle Hotels.
Turnover in equities reached 925 million shares by 6.00 p.m., although that figure included 112 million Walker Greenbank.
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