Market Report - London

The second-line stocks in the FTSE 250 index once again were the stars of the British market, on a day when blue-chip shares were highly volatile. The Mid-250 index under-performed the FTSE 100 by 20.1 per cent between the start of 1997 and the end of January this year, but it has shown some tentative signs in February of reversing the trend.

Yesterday, there was virtually no contest. The Mid-250 closed up 68.7 points at yet another all-time high of 5,201.0, not far from the day's best level of 5,202.2 (another historic peak).

Footsie, however, veered about like a drunken man after closing time. An initial surge took the index past the 5,800 level to be 57 points higher at 5,821.8, an all-time intra-day high, just after 10 a.m. Over lunch, fears of a weak start on Wall Street wiped out the rally and by mid-afternoon, Footsie was at the low for the day of 5,741.8, down 23.9.

A rally took the market back up to be 27.9 points higher by 4.10 p.m. before a final burst of selling ended the day. At the close, the leading index was up 2.5 at 5,767.3. Paltry though that increase may have been, it still represented an all-time closing peak, and the SmallCap and All-Share indices registered similar achievements.

The market statistics flowed fast enough to please any baseball buff or cricket historian. Helping the Mid-250 index notch new highs was a revival of sentiment in the builders' merchants sector. The rise of the Mid-250 index in recent weeks has also been aided by the presence of a number of high-tech stocks, such as Sage, which gained another 6.7 per cent yesterday.

Traders did their best to keep the Footsie moving ahead with another round of takeover rumours. At the start of the day, the story was that Glaxo Wellcome would launch a hostile bid for SmithKline Beecham after the failed merger talks. By the afternoon, attention switched to Rolls- Royce on talk of a bid from GEC.

Turnover was 885.4 million shares by the 6 p.m. count, of which 54.3 per cent was in nonFootsie stocks.