Week opens with strong gains from TMT sector

Another good day for the technology, media and telecom (TMT) stocks ensured that the FTSE 100 index started the week with a strong gain.

A rebound on the tech-heavy Nasdaq Composite market on Friday gave a lift to sentiment in the morning and the tech rally continued when Wall Street opened in the afternoon.

The supreme court was still hearing arguments about the US presidential election after the close in London but investors were clearly hoping that an end to the long-running saga might be in sight. The uncertainty over the outcome of the vote has weighed on sentiment over the last few weeks.

The recent fall in the oil price has also removed bearish influences on share prices.

Investors continued to be cheered by the prospect of lower US interest rates next year after encouraging comments last week from Alan Greenspan, chairman of the Federal Reserve.

Economists expect the Fed to move to a neutral bias at its December 19th meeting.

The FTSE 100 index closed 82 points ahead at 6,370.3, with TMT stocks producing nine of the best 10 performances. The Techmark 100 index of leading technology stocks advanced 83.94 to 2,878.17.

Gains were rather more subdued among the medium-sized and smaller stocks with the FTSE 250 index gaining 30.7 to 6,545.6 and the SmallCap rising 7.3 to 3,273.9. On the news front, there was little to cause alarm.

Producer price figures for November did nothing to alter the view that UK interest rates have peaked. While input prices rose by 0.5 per cent on the month (and 10.8 per cent on the year), output (factory gate) prices rose by just 0.1 per cent on the month and 0.8 per cent on the year.

The higher oil price that prevailed for much of 2000 was clearly not passed on by the corporate sector.