The FTSE 100 moved confidently through the 6,500 level, boosted by a mixture of encouraging domestic economic news and a firm showing by Wall Street.

The good news encompassed the mid-ranking stocks and the Techmark 100 as well, although it bypassed the FTSE Smallcap index, which has outperformed all the other indices over the past 12 months.

The FTSE 100 ended the day a net 42.7 up at 6,518.5, having reached a day's best of 6,545.1 shortly before US markets opened. The FTSE 250 closed 28.1 up at 6,680.9, while the Techmark 100 climbed 26.06 to 3,420.55. The FTSE Smallcap was 1.0 off at 3,373.9.

The initial upside impetus for the market came from the US, where the Dow Jones Industrial Average finished Tuesday's session 80 points higher, encouraged by remarks about the impact of the new economy made by Mr Alan Greenspan, chairman of the US Federal Reserve, and the absence of any references about interest rates.

Mr Greenspan was due to make another speech last night and delivers his regular twice-yearly Humphrey-Hawkins testimony to the Senate next Thursday.

But there was also much-needed good news from Yahoo!, the US Internet giant, which announced excellent second-quarter results allaying some of Wall Street's concerns about declining Internet advertising.

Mr Bob Semple and Mr David McBain, UK strategists at Deutsche Bank, have adopted a more positive view of the market. "In relative terms we believe the outlook for the UK market is becoming less negative and we would advocate moving the allocation for the UK up from underweight to neutral."

The Deutsche Bank analysts said the interest rate outlook "continues to improve as the evidence of a slowdown in the UK mounts. Moreover, two of the hot spots that particularly trouble the Monetary Policy Committee have taken a notable turn for the better, with further moderation in house price inflation and much lower than expected growth in average earnings."

The analysts also pointed to "a modest improvement in the trend of earnings revisions" and "lessening liquidity pressures".

Viewed purely from the technical angle, "Footsie is looking firmer after its recovery back above rising 50 and 200 moving averages. There are certainly more new chart buys than sells at present," said Mr Richard Lake, technical analyst at Brewin Dolphin.