It was another "new economy/old economy" split in London's equity market yesterday, continuing the trend of recent sessions.
The sell-off in the "old" stocks proved to be the more significant trend, driving the FTSE 100 lower after a bright opening and a rather erratic performance for much of the rest of the trading session. But the FTSE 100 index finished only 0.3 easier at 6,359.3, as a late rally only just failed to project the 100 index into positive territory.
While the London market's benchmark index struggled for much of the day, the rest of the market never looked likely to attract any substantial pressure. By contrast the FTSE 250 and SmallCap indices, plus the Techmark 100 index, all finished in good heart and only marginally below the day's best levels. The FTSE 250 ended 33.7 up at 6,227.8, while the FTSE SmallCap finished 16.5 better at 3,185.5.
The most impressive of all the indices was the Techmark 100, which, registering its fourth consecutive gain, raced up 112.9 to 3,256.25, bringing its four-day rise to 13.7 per cent.
Dealers in London were surprised at the lack of follow-through in UK stocks after Wall Street's massive gains overnight, which showed the Dow Jones Industrial Average up 2.2 per cent and the tech-laden Nasdaq Composite up a record 7.9 per cent.
Early in the day the FTSE 100 broke through the 6,400 level for the first time since April 12th and for a short time looked likely to move to the top of its recent trading range of 6,000 to 6,600.
The initial market enthusiasm was almost entirely concentrated in the TMT arena, but that was offset by some more worrying news from the "old" economy sectors, notably food retailing, where J.Sainsbury shares plummeted, as well as engineering, where Invensys shares ran into substantial turbulence after news of its big Dutch acquisition.
Market bulls initially preferred to concentrate on the perceived good news, which continued to drive the TMT stocks higher. The Freeserve takeover story built up a head of steam after news that Dixons, which has an 80 per cent stake in the Internet service provider, has put its holding up for sale.
