With help from New York, the FT-SE 100 index soared 45 points to 3,188.1 in often busy trading. Datastream calculated the surge added £9.27bn to market values.
Following the Glaxo take-over of Wellcome much of the £9m of cash and near-cash that went to Wellcome share-holders could be seeking new investment homes.
Although much is in the coffers of institutions, about £3.5bn is held by Wellcome Trust. Barclays de Zoete Wedd was said to hold the key to the trust cash and there was talk that it had encountered difficulties with the re-investment programme.
It was clear the market was short of stock with some securities houses scurrying to cover their positions. The shortage was clearly related to the fall-out from the Wellcome bid.
The sudden euphoria overwhelmed any worries about the continuing currency turmoil and the prospect of higher interest rates. Indeed, today's Ken and Eddie meeting was confidently expected to leave UK rates unchanged.
Although genuine investment business was the highest for some time, there was a last-minute rush of bed-and-breakfast and other tax-related deals to push turnover tantalisingly close to a billion shares.
Glaxo, as the market continued to warm to the implications of the Wellcome acquisition, gained another 16p to 727p with the US Food and Drug Administration's approval of its migraine drug in tablet form also contributing.
Elsewhere, the main feature was Lloyds' decision to severe its last link with one of the fiercest takeover battles to rage in the City in the bid hysteria of the Eighties.
Through stockbroker ABN Amro Hoare Govett it sold its 4.6 per cent in the Standard Chartered banking group to a spread of institutions.
The deal finally laid to rest a takeover encounterfought at the same time as such epics as Guinness and Argyll for Distillers Co and Hanson and United Biscuits for Imperial Group.
Lloyds is thought to have made a profit of £43m on the deal. Hoare did well, earning a 2.5p profit on each of the 43.8 million Standard shares which closed 5p down at 294p. Lloyds rose 8p to 622p.
On such a strong day take-over speculation was given its head. One yarn put Hanson on course for British Gas, lifting the shares 9.5p to 296.5p.
Television shares, anticipating the relaxation of cross-ownership rules, were again switched on with Yorkshire-Tyne Tees Television rising a further 21p to 458p with Granada said to be prepared to pre-empt any newspaper strike with one of its own. Ulster rose 13p to 702p but Scottish lost 5p to 453p. Chiltern Radio added another 15p to 243p.
WPP, the advertising group, jumped 6p to 107p with a US buyer said to have cleared out the market. Volume was printed at nearly 7 million shares.
Highland Distilleries continued to suffer from its flat results, falling 20p to 377p. UBS put the shares on its sell list. Savoy Hotel `A', with figures next week, rose 13p to 943p. Matthew Clark, the drinks group, gained 13p to 567p following an agency cross at 565p.
Guinness, up 7p at 462p, and some other drink shares were encouraged by Hoare Govett interest. Storehouse, up 12p to 241p, rose on the strength of a rumoured Cazenove buy recommendation; Next, said to be eyeing Laura Ashley, gained 12p to 306p.
Fitzwilton, the Irish conglomerate, held at 53p as Irish supermarket chain Dunne Stores confirmed it was the mystery 9.1 per cent stakeholder.
Smith New Court dropped a further 18p to 420p on worries of a profit warning; Govett, on its proposed fund management sale, added 8p to 293p. There are suggestions the fund management business could be worth 230p a share with the remaining operations commanding a 200p price tag.
British Aerospace's "funny money" rights units fell 5p to 118p with the shares up 6p to 479p. Fisons, with fund managers PDFM declaring a 15.05 per cent interest, rose 2p to 183p.
The bus get-together lifted Badgerline 5p to 138p and GRT Bus Group 13p at 269p. Go-Ahead improved 15p to 191p in sympathy.
Ugland International, the ship owner and manager, sank 18p to 99p (after 92p) following a profit warning. The group is expected to produce £1.4m against hopes of £2.4m.
Owen & Robinson's yawning loss and its decision to withdraw from jewellery retailing left the shares 3p lower at 9p.Reuse content