A strong run by Wall Street and a fresh burst of takeover talk helped shares in London to end a difficult week on a buoyant note.
The FTSE 100 index jumped 143.9 to 6,738.5 as the new economy stocks rebounded from some of their recent weakness. That left the index 180.5 or 2.8 per cent up on the week.
Wall Street provided the initial impetus after the Dow Jones Industrial Average's surge past the 11,000 mark on Thursday.
And the announcement by Sun Life & Provincial that it was in talks with its majority shareholder Axa about a full takeover gave share prices another burst of momentum. Sun Life ended the day nearly 40 per cent ahead, by far the best performance in the FTSE 100.
There was also some vague takeover talk of a bid for Freeserve, the Internet services provider, whose shares had earlier in the week dropped to half their peak level.
The market maintained its strength in the afternoon with the Dow up 60 and the Nasdaq Composite more than 100 points ahead by the time London closed. That gave some of the recently battered technology and telecom stocks a chance to shine with ARM, TeleWest and Baltimore all notching up double-digit gains and QXL.com in the FTSE 250 managing a 36 per cent rise.
It was not all good news for the tech sector, however, as Eidos, the computer games group, saw its shares savaged after a profits warning. The Techmark 100 index gained 158.9 or 3.5 per cent to 4,670.84. At Thursday's close, it had been 21.5 per cent down from its peak earlier in the month.
Gains were not quite so marked in the FTSE 250 or SmallCap indices, which have more of an old economy bias; the former rose 58.5 to 6,564.2 while the latter edged up only 7.3 to 3,399.2.
The market had faced a couple of potential road bumps earlier in the week in the shape of the budget and the US interest rate decision. In the event, the Chancellor of the Exchequer did nothing to alarm investors and the Federal Reserve raised rates by the expected quarter of a percentage point.
Analysts said that the British market was also getting support from the approach of the April 5th deadline for individual savings account investments.
Market strategists at Salomon Smith Barney, noted that Britain tends to outperform other markets at this time of year as the retail investor tries to beat the tax deadline. Tax efficient investment has rescued the market after the severe cash drain caused by the Vodafone/Mannesmann deal, sources said.
Volume was two billion shares by the 6 p.m. count, with Vodafone again the busiest stock.
