Definitely a new economy day on Footsie

Wall Street's strong rally overnight and a good start to the US session yesterday provided the perfect backdrop for London's equity market.

US markets ran on in the wake of a lower than expected rate of increase in US gross domestic product in the third quarter, which was seen as reducing the chances of a rise in interest rates after the November 15th meeting of the Federal Reserve's rate-setting Open Market Committee.

The FTSE 100, meanwhile, ended a generally positive week in good heart, registering its third winning performance out of the last five.

Although the rest of the main indices posted gains on the day, it was not such a good week for the Techmark 100 which was battered in midweek by the fallout from further bad news from the US tech sector.

The FTSE 250 was finally 19.0 up at 6,568.7, for a gain of 66.7, or 1 per cent, on the week, while the SmallCap rose 15.2 to 3,269.2, up 0.3 per cent over the five days.

The Techmark 100 rose 55.77, reducing the decline over the week to 38.99, or 1.1 per cent.

But it was most definitely a "new economy" day with those sectors rejoicing in the strong recovery of the techs and telecoms stocks in the US.

The "old economy" areas were not entirely shunned by investors but provided most of the stocks in the FTSE 100 losers' list.

The performance of the tech stocks was all the more impressive given the 28 per cent slide in shares in Psion, the palm-top computer manufacturer, following a profit warning.

Psion was in the vanguard of the stunning advance by TMT (telecoms, media and technology) stocks during late 1999 and earlier this year, when the company was briefly elevated to FTSE 100 status.

Reed International shares moved towards the top end of the FTSE 100 performance table after news of the $4.5bn acquisition of Harcourt General, the US textbook publisher.

And Bernard Matthews, the poultry and meat products group, which is the subject of a bid from the Matthews family, saw its shares race higher after Sara Lee of the US indicated its intention to counterbid.

In its latest global asset allocation review, the strategy team at Deutsche Bank said: "It will not be an easy ride through the year-end as markets will be buffeted by rising oil prices, profit downgrades and wild swings in investor sentiment."