THE British stock market's stubborn reluctance to follow Wall Street's recent lead and its ability to ignore the strong gains in gilts was reversed in stunning fashion yesterday, as a sudden burst of institutional buying caught market makers on the hop.
The institutional cash flooding into the stock market yesterday gave a much needed boost to turnover, which had dropped alarmingly over the past two weeks, as many of the big investors curtailed their activity. By the 6 p.m. count, volume had reached 846.9 million shares. The value of customer business on Thursday was £1.05 billion sterling.
Talk around the market suggested that a number of Scottish institutions, adopting the view that a prudent budget was on the cards for Tuesday, had taken advantage of the market's sluggish performance to inject sizeable funds.
And helping to fuel the rise in prices was increasing speculation that a big bid was about to be announced the candidates included a host of names, among them British Gas, EMI, Railtrack, Legal & General as well as a number of utilities.
The momentum from yesterday's flurry of money pushed the FT SE 100 index, which had languished in the mid 3,900s for much of the week, back through, 4,000. It lost that level on October 29th, after peaking at 4,073.1 on October 21st. Footsie settled 64.9, or 1.6 per cent, higher at 4,018.7 its biggest points rise this year and equal to its biggest percentage increase.
