All those worries about the shift to a tightening bias by the US Federal Reserve and the possibility that the next move in US interest rates would be upwards faded into the background yesterday as London stock prices raced higher for the third consecutive session.
Sentiment on Wall Street, and, therefore, across markets everywhere, was lifted by news that Mr Alan Greenspan, chairman of the US Federal Reserve, made no further reference to the prospects for US interest rates during his testimony to the House of Representatives' banking committee.
"It seems that the semi-panic over US rates is over and we're back on the bullish trail," said one marketmaker.
Gains in the FTSE 250 were muted, the index edging up 14.4 at 5,734.3, while the FTSE SmallCap was 5.1 firmer at 2,560.7. The latest strong performance from London came after a good showing by Wall Street on Wednesday and again at the outset of US trading yesterday, some encouraging domestic economic news, plus further big gains in the telecoms and financial areas of the market.
Adding to the overall bullishness in the market was news that British retail sales fell 0.5 per cent in April, much worse than the flat figure the market had expected. That raised hopes among some of the optimists that another interest rate cut might be on the cards.
