Late run by banks keeps City in positive mood

It was a close-run thing but London's leading stocks managed to end the session on a positive note, having spent most of the day in the red, as Wall Street posted modest gains and the hint of more take-over activity, specifically in the banks, produced a late run.

Dealers said there was no really powerful impetus to the late recovery; but there was a general view that the market might challenge its record levels in the short term, despite more worries about inflationary trends. Those inflation fears were emphasised by the latest IMF report, which called for further increases in British interest rates.

There was a general feeling that the closure of Wall Street today for the Thanksgiving holiday would choke off much of the business for the rest of the week. Wall Street is open for only a half-day session tomorrow, a session that is not expected to generate much in the way of market-moving business in British stocks.

By the close, the FTSE 100 index had recouped all of its earlier losses to finish 27.6 ahead at 6,561.8.

Turnover in equities was a highly respectable 1.62 billion shares by the 6 p.m. count, with non-FTSE 100 stocks accounting for 54 per cent of the total.