A LATE pick up on Wall Street helped the FT-SE 100 index to close at an all time high. But the buying was narrowly based, with the stock market suffering from the general feeling of lassitude that seems typical of recent Mondays.

While Footsie leapt 20 to close at 4,073.1, a fraction off its new all time intraday high of 4,073.2 recorded just before the close, smaller company stocks fared much less well. The FT-SE 250 index dropped 0.7 to 4,449.4, while the SmallCap index fell 0.4 to 193.3.

Analysts normally believe that a rally which includes the broad market is more soundly based than one which just concentrates on the leading stocks.

The focus on the leaders was understandable, however, in the light of the rekindling of takeover talk about two of the City's favourite targets: Pearson, the owner of the Financial Times, and Zeneca, the pharmaceuticals group. BSkyB, Pearson's supposed predator, issued a denial.

London received an early lift from Wall Street's record close on Friday, when the Dow Jones Industrial Average approached the 6,100 mark. But after opening strongly and recording what was then an all time intraday high of 4,065.1 at 9 a.m., the Footsie drifted off, spending most of the day in a narrow trading range of nine points.

In the absence of substantial economic news, there was, little to guide investors. The equity market received little support, from gilts ahead of today's auction - the benchmark 10-year issue dropped around three ticks on the day - or from sterling, which lost some of its recent gains.

It was only late in the day, when the Dow recovered from a sluggish start to bound ahead - it was 22 points higher at noon New York time that Footsie perked up. Other European markets in Denmark, Spain, Sweden and Turkey also recorded all time highs.

The same factors which have been pushing the market higher for the last few weeks seemed to be fuelling yesterday's rise. Mr Philip Isherwood, UK strategist at Kleinwort Benson, said: "The news from the corporate sector is broadly sound, it doesn't look as if the world is going to end in May, after the election, and liquidity is healthy. It is hard to see where the sellers are." Mr Isherwood was still looking for the Footsie to reach 4,200 this year.

Mr Robert Buckland, UK strategist at HSBC James Capel, said: "The market is fairly valued and cash is an under performing asset, both for investors and for corporates who have been getting rid of it through takeovers, share buy backs and special dividends.