HAVING blasted back through the 4,000 level on Friday, the FT-SE 100 index took a determined, although ultimately unsuccessful, dash at its all time record yesterday, focusing on the probable benefits to stock market sentiment from the expected prudent British budget today.
By the close of a rather frantic trading session yesterday, the FTSE 100 index showed a gain at 4,054.6, only 18.5 below its record closing level of 4,073.1, reached on October 21st. Over the past two sessions, Footsie has risen a massive 100.8 points, or 2.5 per cent. At its best yesterday, the index touched 4,055.3.
And as happened last Friday London's marketmakers were on the receiving end of more aggressive buying interest from local and overseas investors anxious to top up their portfolios ahead of the budget.
"There is a very firm feeling to the market at the moment, much of which stems from last week when marketmakers quite deliberately got themselves into a corner running short books ahead of what was expected to be something of a giveaway budget," was the view of a leading broker.
"The burst of institutional money flooding into the market caught dealers on the wrong foot and caused a short term bout of panic buying," he said.
The FT-SE 250 index saw some strong gains across the second line stocks and finished the session 11.0 firmer at 4,422.3. The 250 reached a session high of 4,426.1 in mid morning. The SmallCap index, meanwhile, gave a resolute performance, closing 2.3 higher at 2 166.3.
As usual during recent sessions, London was given a fillip from across the Atlantic, where Wall Street extended its recent run of gains. The Dow Jones Industrial Average, up over 53 points on Friday, when the index consolidated its move above 6,400, shot through the 6,500 level shortly after the opening yesterday, posting a 40 points plus gain an hour after London closed.
Dealers do not expect Wall Street to gallop much further this week. The market is expected to quieten down ahead of Thursday's Thanksgiving Day holiday, which sees Wall Street shut on that day and half day trading on Wednesday and Friday.
Regarding today's budget, the general consensus is that the Chancellor will cut a penny off income tax, balanced by spending cuts, and will pencil in a much reduced public sector borrowing requirement for next year.
There are fears, however, that there will be increases in taxes on tobacco and alcopops.
Turnover reached 775.7 million shares at the 6 p.m. count, with non FT-SE 100 stocks accounting for just over 55 per cent of the total. Customer business on Friday, when the market raced higher in response to the emergence of some heavy buying interest, totalled £1.51 billion, well above recent levels.
US favourites were well to the fore, with Glaxo Wellcome and SmithKline Beecham strongly supported. The bid stories circulating in the market were said to include, Legal & General.
