An early rally in the FTSE 100 index petered out by the close in the face of losses on Wall Street, but the broader market finished higher. Technology stocks continued their rally and once again displayed their remarkable volatility. Bookham Technology, which came into and then dropped out of the FTSE 100 last year, gained 20 per cent.
The Techmark 100 index of leading UK technology stocks was up 61.01 at 2,787.65, although an early gain on Nasdaq was wiped out by the London close.
Investors seemed reassured by results from Microsoft, Nortel Networks and eBay, released late on Thursday. The blue chips paid more attention to the Dow Jones Industrial Average, which slipped more than 100 points in response to a profits warning from Home Depot, the DIY retailer, and from the latest gloomy economic news.
The University of Michigan's consumer sentiment index was weaker than expected and its decline over the last two months has been the third weakest on record. Investors are becoming increasingly concerned that a US recession is approaching, although this is offset by the consequent potential for US interest rate reductions. Cantor Index's spread on the Federal Reserve's next meeting indicates that investors think a half-point move is now more likely than a quarter point.
In early trading, the FTSE 100 advanced 66.5 to 6,276.4. But for much of the afternoon, it was a toss-up whether the index would finish in positive or negative ground. Over the week, the FTSE 100 index advanced 0.7 per cent, the FTSE 250 1.7 per cent, the SmallCap 2.5 per cent and the Techmark 100 7.9 per cent.
The old-economy stocks suffered again yesterday with ICI the worst performer in the Footsie, after recent profit warnings from US chemical groups, and banks and pharmaceuticals losing ground.
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