The London market hit a two-and-a-half year high today as traders welcomed hints that interest rates will stay on hold. The FTSE 100 Index ended the first trading session in 2005 32.7 points ahead at 4847. Earlier in the day, the FTSE topped the 4851.7 it reached in June 2002.
Figures showing that net mortgage lending rose at the slowest pace since June 2002 quelled fears among traders of an interest rate rise early in the New Year, while data revealing a slowdown in the rate of growth in UK manufacturing last month further allayed the concerns.
Lower oil prices also helped, with the cost of a barrel of US light crude for February delivery lifting just 18 cents to $42.30 in afternoon trading after falling more than a dollar yesterday. That retreat was due to lower demand for heating oil caused by warmer weather in the north eastern United States.
However, US stocks opened on a low note after a surprise jump in factory orders for November fuelled inflationary fears on Wall Street. The Dow Jones Industrial Average dipped 13 points in early trading and stood five points off its opening mark shortly after London's close. (PA)