Shares in London ended a week of recovery in positive mood yesterday as the news from overseas markets continued to lend support. A 101-point rise on Wall Street on Thursday and another rally in Tokyo and Hong Kong set an encouraging tone at the start of the trading day.
The apparent willingness of the South Korean government to accept a bailout package from the International Monetary Fund - and the economic reforms that would imply - also helped sentiment.
The FTSE 100 index jumped 60 points within the first 15 minutes of trading, helped by the inevitable rallies in Asian-related stocks such as HSBC and Standard Chartered.
The market drifted backwards during the rest of the morning, with some modest volatility associated with the expiry of the November Footsie options. But volume was pretty subdued throughout the day, with little in the way of economic news, and only 683.7 million shares were traded by the 6 p.m. count.
A solid start in New York, where the Dow Jones Industrial Average was 32 points higher by the time London closed, helped Footsie pick up speed in the afternoon and the leading index closed at its best of the day, 77.4 points higher at 4,985.8, for a 244-point gain on the week. Traders said that there appeared to be momentum behind the market.
The medium-sized and smaller stocks failed to keep pace. The FTSE Mid-250 rose 23.4 to 4,665.7, while the SmallCap index inched up only 4.3 to 2,279.0.
Domestic news was of little help yesterday. Gilts lost some of their recent gains, with the benchmark 10-year issue dropping around a fifth of a point. And the renewed strength of sterling did little to help equities either, as the pound closed up two pfennigs against the D-Mark at DM2.9531.
On the corporate front, there were some profit warnings, but these were confined to smaller stocks such as Johnson Fry and Reflec. Safeway, which disappointed the market with its report on current trading on Wednesday, continued its decline.
