It was another good day for London's equity market yesterday, with a burst of enthusiasm for TMT (technology, media and telecoms) stocks, driving all the FTSE indices sharply better.
The Techmark 100 index, which features telecoms, high-techs, biotech and related stocks, outpaced all the other FTSE indices in percentage terms. The power generated by the TMTs propelled the FTSE 100 back through the 6,600 level at the close, a move seen as demonstrating the market's willingness to take a run at the 7,000 level.
The Techmark 100 shot up 141.0, or 3.7 per cent, a move regarded by many market observers as helping to restore much of the confidence in the high tech arena after the sharp share price losses in the spring. The Techmark 100 hit a record high of 5,743 back in March this year, before plunging to around 2,865 in May, as TMT stocks were crunched.
Pride of place among the indices, however, went to the FTSE 250 index which just failed to blast through the 7,000 level, although it finished at a closing record of 6,999.3, up 43.6.
Not far behind was the FTSE SmallCap which gained strength all day, eventually closing a net 17.2 up at 3,516.2. The SmallCap is now within striking distance of its all time high of 3,565.7, reached on March 10 this year.
Bulls took further comfort from another increase in turnover. Volume yesterday reached 1.54 billion shares, boosted by another substantial burst of trading in Vodafone Group, which accounted for 163 million shares. And there was further strong evidence of more programme trading activity yesterday.
Programme trades have begun to make a regular appearance in London in recent sessions as fund managers have returned from their summer holidays.
Dealers were increasingly enthusiastic about prospects in coming weeks. "Turnover is on the up and the omens do look pretty good," said one market-maker. He noted the benign interest rate outlook in the UK and the US and took the view that the expected 50 basis points hike in ECB rates would cause few problems to the London market.
"If anything a further decline in sterling will give the stock market a lift," he said. Sterling briefly hit a seven-year low against the US dollar yesterday, although the market would prefer to see a decline against the euro.
A glance at the FTSE performance tables showed TMT stocks in the top eight places in the 100 index and in the top 13 stocks in the 250 index. Pride of place in the 100 went to CMG, the Anglo-Dutch computer group whose shares romped higher after much better than expected full-year figures.
