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FTSE poised for a millennium high

STOCK MARKET dealers are eagerly waiting for the market to reopen after the Christmas break to see if they can start the new millennium with another record for the FTSE 100. A last-minute festive buying spree in hi-tech and telecoms stocks sent the index surging through the 6,800 barrier.

The blue-chip index closed on Friday up 29.7 at an all-time high of 6,806.5, helped by an overnight record-breaking performance by the US indexes.

Trading was painfully slow as a combination of last-minute Christmas shopping, lingering fears of the millennium bug and the shortened dealing hours prompted most big investors to remain on the sidelines. But dealers reported strong demand from private investors - one of the key drivers of the recent bull run. "It has been very busy for a Christmas Eve. The punters are refusing to go on holiday," one trader said.

Small investors' interest in small shares helped to drive the junior indexes to a record. The FTSE-250 rose 8.2 to 6,386.9, while the Small Cap closed 11.9 up at 3,064.2.

Most of the attention was focused on the high-flying telecoms and technology stocks. A sharp overnight rise in the tech-laden Nasdaq index in the US fuelled UK investors' passion for the sectors. Among phone companies, COLT Telecom soared 75p to 3,184p amid hopes of corporate action early in the new year. Rival Energis, another mooted bid target, followed suit with a 37p rise to 3,025p. The telecom equipment maker Fibernet jumped 45p to 1,860p. However, mobile phone operator Vodafone AirTouch slipped 1p to 304.75p after officially launching its multi-billion pound bid for German rival Mannesmann.

Telecom giant BT was also on the receiving end of some selling and fell 19p to 1,427p on reports that it might pip Vodafone in the battle for Spanish carrier Airtel.

In the highly rated technology sector, computer chip designer ARM Holdings, a recent entrant in the FTSE 100, soared 311p to 4,050p amid whispers of new contracts in the new year.

Information giant Reuters climbed 27p to 876p on renewed talk of a spin- off of Instinet, its Internet trading facility, while the hi-tech parts supplier Marconi, the old GEC, rose 38p to 1,039p. But some of the technology high-flyers were hit by profit taking. Among the software groups, Sage fell 25.5p to 700p, Misys lost 29.5p to 916p, and CMG ended 101p worse at 4,600p.

The buying frenzy for the small Net stocks continued. Web investor e- primefinancial rose 3.25p to 15.5p, rival Internet Indirect firmed 15.5p to 75p while Jelly Works, another specialist Internet investor, jumped 17.5p to 108.5p. Tarpan, a small cash shell, was the market's highest riser, up 146p to 480p on talk of an imminent reverse takeover of a privately owned Net company.

Among low-tech stocks, mail order retailer GUS rose another 14.5p to 376.5p as talk of a takeover from the US grew louder, while media group United News & Media firmed 20p to 810p on hopes that a rival might trump the agreed bid from Carlton.

Football club Manchester United was kicked 15p higher to 205p as vague talk of a takeover began doing the rounds again. Among pharmaceutical stocks, Glaxo Wellcome shot 22p higher to 1,691p and SmithKline Beecham put on 11p to 782p on hopes that the New Year will bring the much-awaited merger. Rival AstraZeneca jumped 56p to 2,556p on vague talk of corporate action, while biotech group Cambridge Antibody Technology soared 49p to 540p after announcing an alliance with US giant Monsanto.

Two companies took the unusual step of announcing a bid on Christmas Eve. Frozen food group Perkins Food rose 20.5p to 137p after unveiling a bid approach. Dealers think Unigate is not interested and the bidder might be rival Fyffes, unchanged at 124p, a Continental player, or US ketchup giant Heinz.

Hearing aid tiddler Hidden Hearing gained 10p to 79.5p after the news of takeover talks offset the discovery of accounting irregularities.