THERE were whoops of excitement around the City's trading rooms as the US non-farm payroll report for September came in much weaker than expected and gave an instant boost to Treasury bonds, gilts and equities. The two main market indices, the FT-SE 100 index and FT-SE All-Share index, both hit all-time highs.
Such was the impetus from the report that the FT-SE 100, which had been under pressure throughout the morning and dropped back below 4,000, galloped ahead. The index rose steadily for the rest of the session and eventually closed a net 24.8 higher at 4,024.8. Bullishness in the leaders filtered through into the second line and small cap stocks, which made good progress. The FT-SE 250 settled 6.0 ahead at 4.437.0 and the SmallCap index moved up 2.2 to 2,178.6.
Over the week, Footsie gained 78.4, or 2 per cent, as institutions pumped cash into British stocks at the start of the fourth quarter.
Dealers said the payroll report proved that Mr Alan Greenspan, Federal Reserve chairman, had been right in refusing the clam our to nudge US rates higher.
US Treasury bonds were up well over a full point after the news, and the 10-year gilt raced up to end 25 ticks higher. The 20-year gilt settled over a full point up on the day.
Before the payroll news was published, the leading British stocks had languished. At its worst, shortly after the opening, Footsie was down over 17 points.
