Institutional buyers returned to London's equity market in force yesterday, catching market-makers short of stock and driving the FTSE 100 index through its previous intra-day and closing records.
The index burst through the 6,200 and 6,300 barriers, eventually finishing 152.4, or 2.5 per cent, stronger at 6,307.6. At its best, shortly before the close, the FTSE 100 was up 161.4.
The strength in the leaders did not fully follow through to the second and third-line stocks, but the FTSE 250 and SmallCap indices nevertheless made good progress.
The 250 settled 33.8 ahead at 5,220.2 but remained 12.5 per cent below its all-time closing high, 5,966.6, recorded on June 9th last year. The FTSE SmallCap was 5.1 up at 2,268.1, still some 19 per cent off its record close of 2,792.7, which it reached in May 1998.
Most dealers were surprised at the pace and performance so soon after the cautious comments delivered to the US Senate's banking committee by Mr Alan Greenspan, chairman of the US Federal Reserve.
Strategists remained split on the market's outlook for the rest of the year. Mr Corey Miller at Paribas, a long-standing bull, said the US remained the swing factor.
Turnover at 6 p.m. was 1.1 billion shares, with non-FTSE 100 stocks accounting for a lowly 44 per cent.
