BRITISH shares fought off the effects of a weak opening by Wall Street and managed to end the session with good gains across the leading issues, still sustained by hopes of a further reduction in British interest rates before the next general election.
The bullish feeling about domestic interest rates continued to filter through from Tuesday's summer economic bulletin issued by the treasury. That showed a downwards revision of gross domestic product growth and an increase in the current year's public sector borrowing requirement.
The FTSE 100 index ended the session a net 13.5 higher at 3,765.8, over five points above its level before the 114-point sell-off on Wall Street last Friday evening. There was no real enthusiasm surrounding the market's second-liners, where the FTSE Mid-250 index showed a 4.6 gain at 4,352.3.
London dealers acknowledged the market's resilience in the face of Wall Street's latest jittery performance, which came in the wake of a big slide in Motorola shares. They fell 20 per cent shortly after the New York opening following poor second-quarter figures, released late on Tuesday.
"The market feels fine at the moment, but that is not to say we won't mirror any further bouts of weakness on Wall Street," was the view of one head trader.
Another senior dealer, at one of the European securities houses, said the performance of global equities would be determined by bonds, which maintained their recent good showing.
Treasury bonds were around a quarter of a point higher not long after US markets opened yesterday, while gilts made steady if sedate progress, during the day.
The Dow Jones Industrial Average, burdened by the retreat in technology stocks, was down over 20 points within minutes of the start of trading in the US and down 35 points an hour after London closed.
The real disappointment for traders came in the continuing low level of genuine activity. Turnover at 6 p.m. was 725.9 million, with non-FTSE 100 issues accounting for around 55 per cent of that figure.
Volume was inflated by 58 million shares traded in Graystone, one of the penny stocks. But there was some aggressive two-way trading in a number of the large capitalisation stocks, in which the institutions hold large stakes.
Hanson was a case in point, with over 36 million shares changing hands as the big argument over valuations pre-and-post demerger continued to rage. The conglomerate's shares drifted back again as the market fretted over the possibility of big US shareholdings being sold into an unwilling market.
The cellular phone stocks were also heavily traded, and weakened in the light of Motorola's results.
