London's equity market regained its poise with a degree of style yesterday after being knocked off balance by Thursday's surprise 25 basis points interest rate rise.
The market was helped substantially by Wall Street's good showing overnight, where the Dow Jones Industrial Average finished 66 points higher, as well as by a more settled display by recently unhappy Asian stock markets.
And there was more reason for rejoicing by the market's bulls as Wall Street delivered a straightforward thumbs-up verdict to the US May non-farm payroll report.
But dealers insisted the main driving force behind the market was the continuing stream of takeover/merger activity and the prospect of much more of the same in coming months.
A senior dealer said the latest interest rate increase was being viewed as the last in the current cycle and pointed to the relative stability of sterling and gilts.
The only real areas of discontent in the market concerned turnover levels.
When the curtain came down on a day of high excitement in the London market, the FTSE 100 finished well clear of the 5,900 level, closing 86.5 ahead at 5,947.3. It posted a five-day advance of 76.6, or 1.3 per cent.
The FTSE 250 index, meanwhile, raced up to new intra-day records before finishing 13.0 better at 5,935.0, up 33.2 on the week.
The FTSE SmallCap advanced 8.1 to 2,775.1, slightly higher over the week.
