London stocks forged ahead again with the market gaining in confidence throughout a busy session, reflecting Wall Street's excellent performance on Friday and again at the outset of US trading yesterday. The Dow Jones Industrial Average burst through to a record intraday high during London trading hours.

The FTSE 100 moved into overdrive with the banks particularly strong. The bank sector's startling gains were said to have reflected a severe stock shortage. Insurance and pharmaceuticals were other buoyant sectors helping to stimulate FTSE 100's gains. There was plenty of talk suggesting that the big market-making firms had been caught out by the market's sudden upsurge so close to the FOMC meeting. Additionally the much-higher-than-usual turnover in equities was being attributed to today's meeting of the US Federal Reserve's rate-setting open market committee. Dealers said both Wall Street and London had now fully factored in a 25 basis points rise in US rates.