THERE was barely time for London's equity market traders to catch their breath yesterday before the market continued on its onward and ever upward path, which saw the two main indices, the FTSE-100 and FTSE Actuaries' All Share, move to new all time intra day and closing highs.

Building on last Friday's surges in stock markets on both sides of the Atlantic, and a fresh sprint to new peaks on Wall Street at the outset yesterday, the FTSE 100 delivered a strong, if unspectacular, performance to end a net 9.3 firmer at a record close of 3,977.2. The FTSE All Share settled 4.25 up at a peak 1,961.01.

The FTSE Mid-250, on the other hand, remained way off its all time peak, ending 8.7 better at 4,462.0; the FTSE Small Cap index moved up 2.4 to 2,187.6.

There was a strong groundswell of opinion around the City's dealing rooms that the momentum behind UK equities would drive the FTSE 100 through 4,000 in the short term, with many adopting the view that the index will do so before Friday.

There was much less optimism, however, about the prospects of the All Share index moving through the 2,000 level in the short term.

Traders promise a day of extreme volatility on Friday, which sees the expiry of the FTSE 100 and Mid 250 futures and FTSE100 index options. The expiries coincide with "triple witching" in the US as well as a number of expiries across Continental bourses.

"We're building up for a really big day on Friday," said the head of marketmaking at one of the big UK securities houses.

He conceded, however, that yesterday had proved extremely disappointing in terms of the level of genuine retail activity in the market. "It was a typical Monday, with the big institutions preferring to sit back and see how Wall Street performs before they make any big investment decisions," he said.

He expected London to "crack on" and get to 4,000 on the FTSE 100, given a fair wind from Wall Street. The Dow Jones industrial Average was in excellent heart yesterday, posting a 30 points gain an hour after London closed and seemingly set to record another new closing peak.

It was not only the much improved short term outlook for interest rates in the US and Britain that was behind the powerful trend in London yesterday.

There was a resurgence of speculation in Blenheim, the exhibitions group, after the company confirmed it was involved in takeover discussions. And there was widespread talk around the market that the surge in share prices could produce a burst of all paper bids.

The day's corporate news did no real damage to the view that the interim reporting season was going better than expected.

Turnover at 6 p.m. was a disappointing 509.4 million shares, while customer activity last Friday was worth £1.67 billion sterling.