London's equity market posted its third straight gain yesterday, as investors continued to respond positively to the recent hints by global policymakers that the next move in interest rates on both sides of the Atlantic might be down.
But an eventual modest closing gain in the market was hard won. A fierce battle developed between the market's bulls and bears towards the close of trading yesterday, with the former only just managing to emerge on top after a desperate tussle during the last hour of business.
That late bout of nervousness came just ahead of the testimony of Mr Alan Greenspan, the chairman of the US Federal Reserve, to the US Senate Banking Committee.
At the close, the FTSE 100 index had posted a 10.0 gain at 5,291.7, extending the rise over the past three sessions to 173.1, or 3.4 per cent. At its best, in midmorning, when interest rate optimism was at its height, the index showed a 78.9 gain at 5,360.6.
Gains were spread right across the market, with the FTSE 250 index ending 35.3 ahead at 4,758.6, having hit a session peak of 4,766.6, up 43.3, over the lunchtime period.
There was less enthusiasm for the smallcaps, however. The FTSE SmallCap index nudged up only 1.9 to 2,091.8.
The British increase was in line with strength on European bourses and with Tuesday's rise on Wall Street.
The day's domestic economic news was given a warm welcome, helping to boost returning confidence in the stock market. Average earnings for June rose 4.7 per cent, year-on-year, down from a May figure of 5 per cent, in line with most forecasts. Unemployment in August fell 16,400, more than most had expected.
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