The better outlook for interest rates on both sides of the Atlantic continued to provide a positive background for London's stock market, which ended a generally good week on a firm note.
Any worries that the dual expiries of the FTSE 100 futures and index options might provoke some wild swings proved mostly unwarranted as the index moved into and out of the expiry period showing a 35-point gain.
Dealers were also heartened by the level of turnover in the market yesterday, which came out at 1.6 billion shares, viewed as encouraging for a Friday. That figure was inflated, however, by 177 million shares traded in the penny stock Orchard Furniture.
Turnover in London has flagged recently, with dealers saying that institutions have become increasingly reluctant to make substantial alterations to their portfolios with the end of the second quarter approaching. Some market-makers, however, said yesterday's session included a number of programme trades.
Wall Street's performance on Thursday, which saw the Dow Jones Industrial Average up 26 points and the Nasdaq up 48, gave London a solid base to work from.
And what was even more impressive about London's performance yesterday was its resilience in the face of a steep decline by the Dow, which was always under pressure as US trading commenced yesterday.
It was down more than 130 points soon after London closed in the wake of the profits warning from Xerox.
That news eroded some of the confidence injected into the US market in recent weeks by the flow of economic data which has increasingly been interpreted as reducing the possibility of an increase in interest rates later this month.
The list of benign US economic data has included a much weaker than expected non-farm payroll report and subdued earnings growth last month. Earlier this week, retail sales came in lower than expected, as did the consumer prices data.
And the UK data published this week, including the retail price index, unemployment, average earnings and retail sales data, were similarly seen as market-friendly, with most observers effectively ruling out any shift in British rates after the July 5th-6th meeting of the Bank of England's Monetary Policy Committee.
The FTSE 100 index ended a net 35.2 higher at 6,526.0, a rise of 82.2, or 1.3 per cent, over the week. The FTSE 250 put on 30.4 to 6,533.5, up 38.1, or 0.6 per cent, over the five days.
The FTSE SmallCap edged up 4.2 to 3,330.2, up 30.22, or 0.9 per cent over the week.
