It was more of the same in London's equity market yesterday with a relatively light turnover and a generally undecided tone to the session as global markets waited for the news on US interest rates expected at 7.15pm London time tonight.
As on Monday, the FTSE 100 spent much of the day undecided and shifting in a narrow range. Yesterday the index was down 16.8 at worst, shortly after trading commenced, and up 20.8 at its best, as the US consumer confidence numbers drove the Dow higher.
And, similarly to Monday, at the finish of trading the FTSE 100 perked up to close the day a net 17.5 higher at 6,334.5.
There was a good feeling in the rest of the market too, with the FTSE 250 never looking likely to slip into negative territory, closing 25.9 higher at 6,751.1. The FTSE SmallCap was less impressive than the 250 index, and briefly dipped into the red in mid-afternoon, before heading back up to settle 2.0 better at 3,322.0. The Techmark 100 managed a 1.48 gain at 2,784.41.
There is almost universal agreement among international economists that the US Federal Reserve's open market committee will lop at least another 50 basis points off US interest rates following on from the 50 points cuts made earlier this month.
That view helped push the Dow Jones Industrial Average up 42 points and the Nasdaq Composite up 57 points on Monday evening and continued to drive the Dow higher as trading in London drew to a close yesterday.
News of a steeper than expected fall in the US consumer confidence index for January added to the clamour for a cut in US rates.
And the general view, too, was that a cut in US rates would increase the chances of a cut in UK rates after next week's meeting of the Bank of England's monetary policy committee.
The latest domestic economic news showed consumer credit for December below the consensus forecast and final M4 money supply revised downwards, with both sets of data also increasing the chances of the monetary policy committee lowering UK rates.
The strong probability of rate cuts in the US and the UK was said to have been behind the strong showing by the telecoms stocks.
BT, with its substantial debt burden, was seen as a big beneficiary of rate cuts and its shares were also lifted by reports that the company will abandon plans for an initial public offering of Yell, its directories business and demerge the company.
Vodafone, the biggest UK company by market capitalisation, was another powerful upside influence in the FTSE 100.
