Bid rumour and survey boost trade
SUDDEN and powerful burst of takeover rumour-inspired activity in the pharmaceuticals sector, plus a bullish survey of distributive trades from the Confederation of British Industry, were behind a strong showing by leading stocks yesterday.
The speculative buying in the drug stocks and the impact of the CBI survey on the consumer areas of the stock market helped damp down the ever-present worries in London about the crucial US non-farm payroll report for August, expected this afternoon.
At the close, the FT-SE-100 index was 14.5 higher at 3,887.2. Second-line stocks were left well behind, however, as the big institutions and speculators concentrated their resources on the leaders.
The FT-SE Mid-250 made good progress in mid-morning, but faltered in mid-session and closed only 0.7 higher on balance at 4,406.7.
The market's firm feeling at the close was in contrast to the start of trading which saw share prices struggling to cling on to modest early gains, with market-makers unconvinced about Wall Street's security so close to the non-farm payroll report.
But with the excellent news from the CBI survey, which showed retail sales running at their best levels for eight years, share prices began to accelerate, helping sentiment across the market.
Fresh worries about Wall Street began to erode sentiment in the afternoon