A BENIGN US non-farm payroll report for April was the icing on the cake for London's stock market yesterday.

Fears that the Labour Party's demolition of the Conservatives in the election would bring substantial downside pressure to bear on the market were quickly dismissed after an early markdown, and sentiment gradually improved. Responding to relief over the lack of an early sell-off and the early powerful performance of Wall Street, the FTSE 100 shot ahead to finish the session at an all-time high of 4,455.6, up 10.6. Earlier in the session it hit a new intra-day peak of 4,468.4.

However, the FTSE 100's record-breaking move was not shared by the rest of the equity market. The FTSE Mid-250, representing the second-liners, never looked like mirroring the performance of its senior index, closing 4.0 lower at 4,498.1, but well clear of a session low of 4,490.1, while the SmallCap was finally 1.0 off at 2295.3.

The US economic news and the decisive outcome of the general election rounded off a splendid week for the FTSE 100, which registered a rise of 58.9 or 1.3 per cent over the period. The FTSE 250, on the other hand, fell 2.4 over the same period and the SmallCap 3.2.

The low level of retail business in the market showed that fund managers at the big investing institutions had not yet decided which way to jump.

But there were indications from salesmen and market-makers that they were bracing themselves for a flurry of activity next week. However, they said any large-scale action would probably be delayed until the first meeting between Mr Gordon Brown, the new Chancellor of the Exchequer and Mr Eddie George, the governor of the Bank of England, on Wednesday.

Wall Street made good early progress yesterday, with the Dow Jones Industrial Average regaining the 7,000 mark after the lower than expected increase in US non-farm payrolls.