MUCH of the action in London stocks yesterday was concentrated in the banking sector as the flotation of the former Alliance & Leicester building society, which followed Abbey National in adopting banking status, triggered a wave of buying in the sector.
Meanwhile, good news in the banks spilled over into other areas of the market, helping to drive share prices of the FTSE 100 constituents higher for the fifth consecutive trading session.
But senior market traders insisted that turnover across the broadmarket, excluding the banks, remained extremely depressed and was likely to stay the same until the outcome of the May 1st general election is known.
"Without the Alliance float it would have been a dismal day for the market in terms of share price performance and turnover levels; the institutions refuse to get involved, outside of special situations," said one.
And with economic news in Britain and the US thin on the ground this week there is little to excite the market.
In Britain the retail sales numbers for March will be scrutinised carefully for signs of a pick up in spending in the high streets, which could well be seen as adding to the calls for a rise in interest rates after the election. No substantial economic news is due from the US.
Wall Street's good closing performance last Friday, when the Dow Jones Industrial Average moved up 44 points, helped London's confidence at the start of the session. But the US market did little for overall sentiment at the start of trading yesterday when the Dow kicked off in good heart, before slipping back into the red and stabilising as London finished for the day.
At the end of the trading session, the FTSE 100 was left with an 18.2 gain at 4,328.7. Second-line stocks were largely ignored however, the FTSE 250 index finishing a dismally quiet session a net 0.5 firmer at 4,518.2. The FTSE SmallCap settled 0.4 easier at 2,295.6.
Overall turnover in the market at the 6 p.m. cut-off point was 695.0 million shares, but that number included 88 million shares traded in Alliance & Leicester, over 12 per cent of the total figure.
The sparkling debut performance by Alliance & Leicester took the market by surprise with Friday's expectation of an opening level around the 520p to 530p mark left behind following the aggressive bidding in the first of the three auctions of stock being sold by members of the former building society.
And not even the most optimistic market observers had expected the shares to top the 578p mark achieved during the early afternoon. Marketmakers said the second auction was not expected to be fully subscribed.
Other bank stocks raced higher in sympathy with Alliance & Leicester and provided five out of the top six performers in the FTSE 100. Hints around the dealing desks suggested the flotation would trigger revaluations of other big banks, notably Barclays and NatWest.
