TMTs still dominate but frantic trading calms

It was another session of records all round for many of the FTSE indices yesterday as last week's buying frenzy in the TMTs telecoms, media and tech stocks continued apace, albeit with a few notable exceptions. But the vigour of the buying interest in the market yesterday was much reduced from the often frantic trading experienced by market makers on Thursday and Friday.

The more sedate pace of activity yesterday was attributed to the absence of US interest; Wall Street was closed yesterday for the Labor Day holiday.

There were few traders in the market prepared to call a short-term high in the TMTs and other areas which erupted with such momentum last week. Equally, there was still plenty of talk that the market had been squeezed higher during the bank-holiday shortened week and that the squeeze which saw market makers scrambling for stock - had mostly been unwound. That could well have been the case in the front-line stocks, represented by the FTSE 100, which remains at least a couple of sessions away from testing its record level.

At the close yesterday the FTSE 100 only just managed to finish the day in positive territory, settling 3.1 ahead at 6,798.1. That rise extended the 100 index's winning sequence to a sixth consecutive session. The Techmark 100 pushed up a further 27.39 to 4,287.0 its seventh consecutive advance.

But easily the best of the performances from the main indices came from the FTSE 250, the SmallCap and the All-Share indices all of which raced higher to record intra-day and closing highs.

The 250 pushed up 40.7 to 7,149.6, having hit 7.167.3, and the SmallCap rose 18.3 to a best-ever 3,629.1. The All-Share settled 4.38 up at 3,265.95, after 3,277.34. The All-Share's total return of 5.2 per cent in August was its best monthly performance of the year.

Commenting on the startling performance of the TMT sectors, the strategy team at CSFB said it believed the market could be experiencing a re-run of the "TMT experience" from earlier in the year. It said "benign economic data has increased fund managers to run down liquidity. But as earlier rate rises begin to bite, the risk of a cyclical slowdown in earnings grows. In such a world we should not be surprised if investors are increasingly willing to pay up for secure growth. The technology component of TMT looks especially well placed to benefit from that theme."

The poor performance of Vodafone Group, the market's heaviest weighted stock, proved a substantial drag on the FTSE 100 index, alone accounting for around 40 points.

As from last Friday Hutchinson Whampoa can sell a 3 per cent stake in Vodafone, acquired via Vodafone's acquisition of Mannesman.

Turnover in equities was 1.77 billion shares.