Vodafone turnover again breaks daily record

The reweighting of Vodafone AirTouch after its successful bid for Mannesmann, the German telecoms group, remained the single most important factor driving trends on the FTSE 100 yesterday.

Dealers said the substantial upgrading of the Vodafone weighting post-Mannesmann - which was being carried out after London closed yesterday - was responsible for getting on for half of the action on a day when turnover on London's stock market reached a record daily high of 4.4 billion shares. Turnover in Vodafone alone exceeded 2.1 billion shares, the biggest daily volume in a single stock on record.

Towards the end of a session full of drama, on the takeover front as well as for company news, the market's trading screens suddenly erupted with a series of flashes of blue and red as a burst of arbitraging between the cash market and futures drove the index in both directions.

At the end of the session, the FTSE 100 was left with an 86.5 decline at 6,193.3, having moved substantially in both directions.

But while the market leaders suffered, the second- and third-ranking stocks enjoyed a day of gains, with both the FTSE 250 and SmallCap indices finishing at or around the day's best levels.

The FTSE 250 closed 103.6, or 1.7 per cent, higher at 6,147.4, its best of the day, while the FTSE SmallCap was 23.3 higher at 3,160.3. The FTSE All-Share, weakened by the decline in the 100 index, was 24.1 down at 2,944.0.

On a more fundamental note, London remained wary of Wall Street, which gave conflicting signals overnight.

There was no domestic economic news influencing the market. Thursday's 25 basis-point increase in UK interest rates had been widely anticipated, but there was a growing feeling among many market observers that more rate rises were on the horizon, with 6.5 per cent generally seen as the top of the current cycle.

Another big sell-off in the banking sector, a decline in BP Amoco and an abrupt reversal of the recent upsurge in the media arena also put the FTSE 100 under pressure, as did a reversal in some of the high-flying technology stocks.