The FTSE 100 notched up its seventh consecutive gain yesterday and there were even more impressive rises among the junior indices after the Bank of England's monetary policy committee and the European Central Bank joined the US Federal Reserve's open market committee in cutting interest rates by 50 basis points.
At the close, the FTSE 100 was up 61.8 at 5,278.1, having reached a session high of 5,294.6 and passing the 5,286 mark - which is seen as a crucial technical level for the index.
The most startling performance came from the FTSE 250, which raced up 126.9, or 2.3 per cent, to 5,653.8, having been up to 5,668.6 with the help of strong gains among many of the media stocks such as Carlton Communications, GWR, Chrysalis and Informa Group.
The FTSE SmallCap jumped 46.0, or 1.9 per cent, to 2,428.7 and the Techmark 100 47.03 to 1,501.78, re-crossing the 1,500 level for the first time since late August.
While there was no surprise at the decisions to lower interest rates, the extent of the cuts caused some raised eyebrows in Britain. It was the seventh cut in British rates this year and the first 50 basis points shift since February 1999.
While the FTSE 100 was in positive territory for much of the session, it did not enjoy wholehearted support until late when Wall Street moved into top gear and posted a 16-point gain not long before London closed. The 100 index was up around 20 points as the UK rate cut news hit the market and quickly gained another 10 points before retreating into negative ground, amid concerns that the monetary policy committee had been made aware of even more bearish economic data.
Mr Bob Semple, UK equity strategist at Deutsche Bank, adopted a supportive stance on the market and said: "While it may be a choppy ride, we believe investors should take the opportunity to buy into any weakness." He added that "over the next 12 months, equities are likely to provide superior returns to bonds as monetary and fiscal expansions start to work their magic. The valuation of the market remains well supported, with the earnings-yield ratio at depressed levels."
Turnover in equities was a hefty 2.9 billion shares by the 6 p.m. count.
