LONDON -- Having spent most of the summer struggling to stay awake, brokers and dealers finally received a welcome wake-up call Wednesday. Initially, it seemed the decent rally in
S&P 500 futures and
futures, inspired by better-than-expected figures from
, would be ignored in London. As one broker said this morning: "To be honest, the market doesn't really want to roar."
But after another slow start, trade started to pick up steam. By the close the
ended up a healthy 39.5 points at 6515.30, while the
index of leading technology shares finished 27.05 points higher at 3421.54.
On the main index,
was one of the session's biggest gainers. Although takeover activity has resurfaced in the chemical sector, dealers say that ICI is back in demand in anticipation that results, due at the end of the month, are going to be better than previously forecast. ICI closed up 26p to 511 ($7.75).
Banks remain in the spotlight after
issued an upbeat assessment of the sector.
continued to star, putting on another 43.5p to stand at 848.5. In just three sessions, HSBC has gained almost 12%, not bad for a stock from a sector that has been pressured for some time.
Royal Bank of Scotland
also moved center stage on the Goldman report. Barclays gained 16p to
15.16, while RBS put on 33p to
, which came under some further heavy selling pressure early on, managed to move back into positive territory on the day. Brokers reported active bottom-picking and Lloyds closed up 6.5p at 583p.
Among the telcos,
bounced back after a couple of weak sessions, and closed up 8.5p at 312.5. News that the
European Communities Merger Task Force
has approved the sale of wireless operator
was seen as the most likely factor behind the recovery, although full approval still has to come from the
failed to hold onto early gains after a far-from-impressive board performance at its annual general meeting, held in Manchester.
The company told investors that the slide in its shares, which have fallen by around 39% this year, was due to general sector weakness. However, this conveniently ignored the fact that BT has underperformed the sector by 26% this year. By close, the market had knocked 18p off the shares to 900.
Cable & Wireless
also remained weak, even though
Morgan Stanley Dean Witter
restored the stock to a rating of outperform, with a target of
14.50. The company was the main index's biggest loser, shedding 55p to
In the tech sector,
failed to hold all of its Yahoo!-inspired gains, but still managed to close up 6p at 314, while handheld computer maker
had a roller-coaster day after the company also announced a foray into Canada by taking over
. The deal will cost Psion
242 million, of which
100 million will be cash with the balance in Psion shares. Psion closed unchanged at 665p.
Elsewhere among the mid-caps,
was sparked into life again after
upped it to a buy rating from market perform. This followed the company's deal to operate nuclear power stations in Canada, and the stock surged 30p to 250. Whether it can sustain the price gains by moving into the Canadian market remains to be seen. Iain Hamilton, utilities analyst at
Deutsche Banc Alex. Brown
, estimated that the Canadian venture is worth just 30p a share so British Energy is starting to look a little overvalued after today's rally. He rates the company a hold at these levels.
Most of Europe's other major stock markets were also able to post gains Wednesday, with the
in Paris closing up 46.2 at 6536.5. Late in the German trading session, the
in Frankfurt was up 55.2 at 7059.14 and the
index was down 21.8 at 5826.1.
surged 2.02 euros, or 5%, to 42.82 ($40.79), after a report the majority of the company's shareholders were prepared to sell to
European telcos were mixed, with
down 2.13 euros, or 3.6%, at 57.68,
closing up 2.40 euros, or 1.6%, at 150.00 on the Orange news and
ending up 0.28 euro, or 1.1%, at 25.06. Equipment maker
all but erased solid early gains to finish up 0.15 euro, or 0.2%, at 77.05.
Blue-chip German technology shares were boosted by the Yahoo! figures, with software maker
up 10.31 euros, or 5.3%, at 204.70,
6.61 euro higher, or 6.2% at 113.25 and
up 8.58 euros, or 5.2%, at 174.89.