The good old days were back for UK technology stocks yesterday, despite the profits warning from Hewlett-Packard, the US computer group, late on Thursday.

A host of technology stocks, CMG, Bookham, Baltimore, Computacenter, London Bridge Software, Sema and Imagination Technologies, managed double-digit gains after a strong rise from the Nasdaq composite on Wall Street on Thursday.

With turnover once again passing the two billion mark by the 6 p.m. count, 2.53 billion shares had been traded. There were signs that the institutions were shifting funds back into some of the stocks that had been in favour this time last year but battered in the last quarter of 2000.

The Techmark 100 index of leading technology stocks rose 112.9 to 2,583.14. With telecom stocks also strong, in particular Vodafone, which regained some of the ground lost earlier in the week, the FTSE 100 index continued its rally, rising 50.6 to 6,165.5.

Over the week, the FTSE 100 fell 0.5 per cent, the 250 gained 0.2 per cent, the SmallCap rose 1.1 per cent and the Techmark 100 jumped 5.5 per cent.

The latest UK economic figures did not give the market much guidance on the outlook for interest rates. Manufacturing output grew by 0.3 per cent in November, while industrial output rose by 0.1 per cent. Those figures were weaker than expected but still positive. Other indications of the trend in manufacturing have been rather stronger: the purchasing managers' index for December was buoyant and the pound has been falling against the euro, helping UK exporters.

The UK corporate news agenda continued to be dominated by retailers. The latest group to issue a profits warning was Body Shop, the cosmetics chain, which warned that its 2000 profits would be 1015 per cent below 1999's. Sainsbury's trading update was rather better received by the market and Christmas statements from Laura Ashley, House of Fraser and Austin Reed were broadly positive.