A strong performance by technology stocks helped the London market shake off worries about potential indigestion from a large rights issue and a share placing. Logica announced that third quarter revenues were growing strongly while Autonomy made a reassuring trading statement and bid talk surrounded Bookham. All this helped the Techmark 100 index to gain 53.46, or 2.8 per cent, to 1,958.96.
Technology and telecommunication stocks made up the eight best performers in the FTSE 100 index, helping the blue chip benchmark close at its high for the day of 5,868.3, up 40.8.
Footsie had opened weaker on talk that the appointment of Sir Christopher Bland to replace Sir Iain Vallance as BT chairman would be followed by a €5 billion rights issue. Talk of such an issue has been floating about the market for weeks but the imminent prospect of such a substantial cash call pushed the FTSE 100 down 49.9 to 5,777.6 in early trading.
To add to the pressure from equity supply, Goldman Sachs said it had placed more than €500 million worth of stock in Billiton, the mining group, on behalf of Anglo American. And financial group Old Mutual said it was issuing $300 million in shares to help pay for a US purchase and a $245 million convertible bond. Billiton, BT and Old Mutual were the worst performers in Footsie.
Wall Street helped London shake off the supply worries by following up Wednesday's strong gains with a further advance in early trading. Weak employment data encouraged hopes that the Federal Reserve would cut interest rates again at its meeting in May.
Wall Street's opening helped all the main UK indices close in positive territory with the FTSE 250 up 0.6 at 6,309.2 and the SmallCap 14.8 higher at 2,995.1.
Turnover was 1.85 billion shares by the 6 p.m. count.
While most analysts continued to believe that UK equities can make further gains from current levels, some view the recent rally with a sceptical eye.
