New-wave stocks give the impetus for surge

In a sharp reversal of Wednesday's trend, which saw many of the so-called old economy stocks helping to bolster a flagging British equity market, the technology, media and telecoms stocks were behind a resurgent FTSE 100 yesterday.

There was also help from the recently-depressed pharmaceutical stocks, AstraZeneca, Glaxo Wellcome and SmithKline Beecham, dubbed "middle-aged economy" stocks by some market observers. "They've been around for a long time, but it is a hi-tech business" as one put it.

The new-wave stocks were led by BT, whose shares staged a sharp

comeback after enduring extreme pain earlier this week in the wake of the AltaVista and NTL Internet access pricing initiatives. That fightback, which saw BT stock climb 18 per cent at its best yesterday, followed the announcement of the company's plan to introduce an all embracing global mobile Internet services business, based on Logica's wireless application protocol (WAP).

Many of the other new-wave stocks were quick to follow BT, with Logica an obvious example.

But even without BT's startling performance, the London market derived strong support from Wall Street's performance on Wednesday. The Dow Jones Industrial Average ended up 60 points and the Nasdaq Composite up 49 points, despite another speech by Mr Alan Greenspan, chairman of the US Federal Reserve, highlighting the pace of expansion in the US economy.

Recent speeches by highly influential figures in the US, notably Mr Greenspan and Mr Arthur Levitt, have been a constant reminder to markets of the probability of more interest rate rises in the US in the short term, possibly as early as the next meeting of the Fed's rate-setting open market committee.

The US markets were not so supportive yesterday, however, with the Dow dropping over 117 points early in the session, before fighting back into the black after London finished. The Nasdaq put up an impressive showing, on the other hand, taking another dash at the 5,000 level as the Dow rallied.

Sentiment was supported by the decision of the Bank of England's monetary policy committee to leave rates on hold, coming as no surprise, but nevertheless a welcome development.

The FTSE SmallCap recorded another closing high at 3,535.0, up 44.

Turnover in equities fell below the two billion-share mark for the first time since February 28th, eventually settling at 1.9 billion.