Footsie slipped its traditional tie to the US equity markets yesterday and rose for the eighth consecutive trading session despite late weakness on Wall Street. The leading index of blue chip stocks ended the trading session 19.5 higher at 6,431.5, ensuring a straight rise of 230 points since the end of last month and apparently giving the lie to the classic "sell in May and go away" view of stock markets.
By the close, the Footsie was less than 200 below the closing peak at the end of April as investors hoped for a glut of merger activity with companies benefiting from high stock valuations and the low cost of borrowing.
Debate about the cost of borrowing continued to rage yesterday with the market evenly divided about whether the Bank of England's monetary policy committee will cut interest rates to 5 per cent tomorrow or leave them at 5.25 per cent. Overnight figures from the British Retail Consortium showed that likefor-like sales were down by 1.3 per cent year on year. Nevertheless, Footsie held its ground, buoyed by strong profits from Vodafone and Stagecoach and some merger speculation linked to BSkyB.
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