Just when the equity market's monetary union feeding frenzy looked like subsiding, London's equity market was sent spiralling to new peaks. Strong performances from BT and Cable & Wireless were the main cause but so was another powerful showing by gilts.
The two telecom shares shot up in the wake of news that WorldCom, the US telecoms group, had trumped BT's controversial offer for MCI, forcing the British company to shift its acquisition focus.
The market's gaze instantly alighted on Cable & Wireless. Between them, the performances of BT and C&W were responsible for almost 20 points of the FTSE 100 index's closing gain.
With further takeover fever emerging in the rest of the telecoms/cable arena, the story was responsible for a large part of the move to new records in all the leading indices.
There were substantial rises for Vodafone, long viewed as a potential takeover target, and Securicor, where BT has long coveted the group's minority stake in Cellnet, the mobile phones group.
There was also a scintillating stock market debut for Northern Rock, which kicked off its career at 470p, well ahead of the most optimistic forecasts, after some aggressive bidding for stock by the big institutions at the first of the auctions being held by ABN Amro Hoare Govett.
With Northern's debut providing further impetus for the banking sector, the FTSE 100 launched a determined and ultimately successful attack on the 5,300 level, eventually settling 72.9 higher at 5,317.1, easily a new closing record.
After a strong opening on Wall Street, it touched an intra-day peak of 5,293.2.
The FTSE Mid-250 was left for dead by the pace of Footsie's latest advance, managing only a modest 9.5 gain at 4,839.4, a new closing peak.
At its best, that index hit 4,839.6. The FTSE SmallCap rose 8.5 to 2,343.5.
The FTSE All-Share index was lifted 27.3 to a record close of 2,482.39, after an intra-day peak of 2,483.35.
Volume in equities was substantially boosted by the massive turnover in Northern Rock, after the auction activity, and BT, after the MCI news.
By 6 p.m., some 1.2 billion shares had changed hands in the market, with non-FTSE 100 stocks accounting for 55 per cent of the total. Northern Rock and Shell between them accounted for 32 per cent of the overall total.
Shell's move to restructure its European petrol retailing business, involving the loss of 3,000 jobs and a return to petrol price wars, saw its shares move towards the top of the FTSE 100 performance table.
