Footsie soars in Christmas rush

THE FT-SE 100 index jumped to a record high on Friday, breaching the 6,800 barrier for the first time, as investors took advantage of the last buying opportunity before Christmas to stock up, writes Dan Gledhill.

Although the stock market closed at lunchtime, the blue-chip index had time to reach a peak of 6,806.5 after a gain of 29.7 points. With most dealers having long since vacated their desks for the Christmas break, the volume of 162 million shares was much lower than the 1 billion transacted on a typical day.

Dealers attributed the market's strength to another strong overnight display on Wall Street where the main indexes have also achieved unprecedented levels.

Another factor was the German government's decision to abandon the crippling tax barriers on corporate shareholdings which have been accused of inhibiting entrepreneurship. Thursday's announcement, which will allow companies to unravel their complex cross-shareholdings without incurring a large tax bill, prompted the Dax index of leading German shares to jump 4.46 per cent. However pre-millennium concerns were also highlighted as a bullish influence.

One dealer said: "Call me a cynic, but I think this has been a classic case of prices being driven by Y2K. Funds have closed their books ahead of the year end and no one is out there selling."

Private investors, meanwhile, continued to demonstrate their insatiable appetite for technology stocks. ARM Holdings, a recent inductee to the FT-SE 100, was the index's strongest constituent with a leap of more than 8 per cent.