It was up, up and away for London's equity market for much of yesterday, with investors celebrating the prospect of a cut in domestic interest rates, possibly as soon as the next meeting of the Bank of England's monetary policy committee, scheduled for February 7th-8th.
And the rate cut story was not the only factor driving the market forward yesterday. London also responded to a strong showing by Wall Street on Tuesday when the Dow Jones Industrial Average pushed up 71 points and the Nasdaq Composite a further 82 points.
After the close, Compaq, the computer manufacturer, posted a big gain after US market hours following well-received fourth quarter numbers.
US markets are also getting increasingly excited by the prospect of a cut in interest rates after the Federal Reserve's open market committee meets on January 30th-31st.
There is a growing conviction in markets that the Fed might well drop US rates by another 50 basis points, having done the same at the start of the year in response to the apparent slowing of the US economy.
Wall Street put on another decent showing yesterday, the Dow virtually level as London closed and the Nasdaq Composite up around 30 points at the same time.
The clincher for London yesterday was the publication of the minutes of the January 10th-11th meeting of the monetary policy committee. The minutes revealed that the committee voted by the closest possible margin, five to four, to leave rates on hold.
The news was interpreted by the market as meaning that a cut after the February meeting has now become a very strong prospect.
The FTSE 100 index pushed back through the 6,300 level, hitting a session high of 6,309.2 at best, before the market's bulls ran out of steam and cash to leave the index a net 49.7 higher at 6,264.4. The other indices delivered equally powerful performances, especially the Techmark 100, which raced up 70.66 to 2,805.75, revelling in the new-found strength of the technology and telecoms sectors.
The FTSE 250 moved up to 6,725.2, before dipping off its best to finish the day 37.3 ahead at 6,713.8, and the FTSE SmallCap gained 18.8 to end at 3,322.8.
