THE FTSE 100 index broke through the 4,400 level for the first time yesterday, hitting new closing and intra-day highs in the process, as European markets registered their relief at the latest comments by Mr Alan Greenspan, chairman of the US Federal Reserve.
He told Congress that the Fed had no intention of raising interest rates simply to bring about a correction in the stock market.
Other leading indices also penetrated their previous intra-day and closing levels as a wave of buying interest from British and overseas institutions flooded into all sections of the market.
The FTSE 100 hit an all-time intra-day record of 4,402.7, but came off its best levels to close a net 39.2 ahead at 4,399.3.
The FTSE Mid-250 finished at a new peak of 4,707.5, up 28.9, while the SmallCap ended 7.0 up at 2,360.1, having touched a peak of 2,360.3.
Strategists said the second half of Mr Greenspan's testimony to the US Congress had reassured the big institutions, many of which had been holding back from pushing more cash into stocks in case the Fed chairman repeated his warning of irrational exuberance on Wall Street.
Mr Greenspan told Congress that if analysts' forecasts of earnings growth were correct, shares were probably properly priced, although he added the rider that if margins did not improve in the next few quarters, then the market would run into some difficulty.
Other powerful positives behind the market's surge yesterday included a batch of generally encouraging corporate results from leading FTSE 100 stocks.
