The last few minutes of the trading session, involving the daily auction, saw the FTSE 100 index pick up to close the week with its fourth winning performance out of five. That late move put the final seal on a good all-round performance by London's equity market, with all the main indices finishing with good gains. Hourly readings of the 100 index gave a slightly misleading picture of the day's performance. For much of the day the index dipped into negative territory, never by much but always keeping market-makers and dealers on their toes.
The background to the day's events was generally seen as positive, with Wall Street kicking on comfortably overnight when the Dow Jones Industrial Average rose 47 points and the Nasdaq Composite 79. There remained no real concerns in the US about next Tuesday's meeting of the Federal Reserve's Open Market Committee (FOMC), which is now generally expected to leave US interest rates on hold. Some dealers warned, however, that the FOMC might take the opportunity to remind markets of its concerns about any emerging inflationary trends.
On the domestic front, there was nothing to unnerve London, with the flow of interest rate-friendly news continuing. Hard on the heels of the better-than-expected news on average earnings and the unchanged retail sales data was news of a bigger-than-expected surplus in the July public finances and encouraging news on provisional M4 money supply and lending. That encouraged the market optimists who had been unnerved by the midweek news that the Bank of England's Monetary Policy Committee was split five to four at its August meeting when rates were left on hold.
The FTSE 100 finished a net 25.5 higher at 6,543.7, not far from its session high of 6,552.0. At its worst it was down 7.4 at 6,5210.8. The Techmark 100 outpaced the other indices, racing up 60.6 to 3,651.84, while the 250 index added 33.6 at 6,913.2 and the SmallCap 10.2 to 3,445.8.
Over the week, the 100 index rose 159.2, or 2.5 per cent, the 250 71.0, or 1 per cent, and the SmallCap 48.72 or 1.4 per cent. But the star of the show over the period was the Techmark 100 which jumped 158.7 or 4.5 per cent.
Mr Bob Semple, UK equity market strategist at Deutsche Bank, said: "The market feels as if it wants to go better, but remains stuck in its trading range. The US interest rate news looks okay, but the UK is still not clear and there remain worries about corporate earnings". And a senior salesman at one of the big international investment banks said he remained positive about London despite the possibility of a rate rise after the September 6/7 monetary policy committee meeting.
Turnover was 1.4 billion shares.
