Market Report - London

Concerns that equities would suffer a big sell-off proved groundless yesterday as the British market cruised into the weekend on a new closing high.

The FTSE 100 index ended the day up 23.3 at 5,629.7 while the second-line FTSE Mid-250 gained 14.4 to 4,970.4 and the SmallCap rose 7.3 to 2,410.6.

Pessimists were encouraged early on. The blue-chip index started on a weak note in response to a poor showing by the Dow Jones on Thursday.

And, from an opening just below 5,600, it dribbled lower as dealers took some of the stuffing out of a market which has been squeezed higher following last Friday's late mega-merger announcement.

Seven straight sessions took the Footsie to an intra-day high that was already above several economists' end-of-year forecasts.

But a feeling that everything was overdone started on Thursday and, by mid-morning yester day, there were signs of a big correction.

Footsie was down 50 points as a wave of selling flowed through the financial sectors, which many strategists already considered overvalued because of long-running consolidation speculation.

Nevertheless, it transpired that a rogue trade in Barclays was responsible for the slide. The wrongly priced order sent Barclays down 160 points in a matter of seconds and, consequently, pulled the Footsie back 15 points.