Corporate activity helps Footsie rise

Another burst of real and rumoured takeover and merger activity helped London's recently battered equity market move well clear of 5,000 points on the FTSE 100 yesterday.

The index briefly dipped below that psychologically important level last Friday, before stabilising and staging a powerful rally.

The latest surge of corporate activity gave a much-needed fillip to a market poised to rally further after Wall Street's recovery on Friday.

That saw the Dow Jones Industrial Average rally from an uncomfortable opening to end up almost 180 points, as some of the tension ahead of publication of the Starr report began to wane.

And with Wall Street delivering another scintillating performance at the start of trading in the US yesterday, London recouped much of the ground lost at the end of last week. The Dow posted a 200-points-plus gain shortly after London closed.

At the end of the London session, the FTSE 100 was 150.0 higher at a session high of 5,268.6. The FTSE 250 rose 39.4 to 4,736.7, spurred on by takeover action in oils and textiles, while the FTSE SmallCap nudged up 6.0 to 2,094.0.

There was good news on the domestic economic front, with producer price data for August showing output prices down 0.2 per cent and input prices down 0.9 per cent. These numbers were seen as an indicator that there is scope for a cut in UK interest rates.

Marketmakers said there had been a gradual return of confidence to the market during the day, with President Clinton's resilience seen as giving substance to Wall Street and the rest of global markets.

Turnover in equities was a highly respectable 921.6m shares.