A White Paper is due in the next few weeks. It will point to greater promotion of public transport at the expense of the motor car.
In anticipation of Government moves, transport shares have already enjoyed exuberant runs in the past year, outperforming the rest of the market.
FirstGroup led the latest march with an 18.5p gain to 427p. Not far behind was Stagecoach, up 31p to 1,266p. National Express put on 22.5p to 1,079.5p and Railtrack 18.5p to 1,182p. Stagecoach is one of the best performing transport shares; it arrived at 112p five years ago.
IT shares, ahead of ComputaCenter's arrival, again put on a power display with FI up 145p to 1,500p and Misys strengthening its Footsie claims with a 220p gain to 3,570p.
The three leading indices made headway. Footsie ended 29.6 points higher at 5,907.4. At one time was up 63.4. The mid and small cap indices moved confidently to new peaks.
Nycomed Amersham, the medical group, had the unusual distinction of topping both the blue chip winners and losers boards.
The non-voters jumped 109p to 2,100p while the voting shares fell 87p to 2,007p. For once it was not a distortion created by order-driven trading. As part of a capital reconstruction the two-tier system is being abolished with all shares given equal votes. The disparity between the two prices merely acknowledged the changes.
Figures lifted Carlton Communications 23p to 517p and Compass, the caterer, continued to digest its results as well as takeover possibilities with a 46p rise to 1,186p.
For the second day running financials clawed their way back as investors took the view they had been over-sold. Norwich Union, Schroders and Woolwich were among those in form although National Westminster Bank missed out, falling 19p to 1112p.
Mirror, the newspaper group, was the day's hot takeover tip. The shares jumped 6.5p to 207p on suggestions of a German offer at around 260p. The group is also talking to analysts this week.
Shell was soft, off 3.25p at 448.25p. An uninspiring investment presentation in Holland was blamed.
TI's take over strike at EIS prompted a revaluation of other engineering groups. Weir, 19p at 278.5p, and IMI, 15p to 524p, were among those to benefit. Engineer UPF jumped 26p to 105p as a possible bidder appeared. Babcock International, firm this month, put on another 1p to 92p.
The VideoLogic Sega saga continued as shares of the 3D graphics company moved ahead 5p to 85p on renewed talk that the Japanese Sega giant will confirm its use of VideoLogic's second-generation PowerVR 3D technology today.
Millennium & Copthorne, the hotel chain, fell 22.5p to 594.5p. Hong Leong Investments, the Far Eastern group, duly confirmed it had trimmed its stake, selling 3.75 million shares. It now has 52.54 per cent and says it intends to remain the controlling shareholder. Hotelier Cliveden, where bid talks are under way, firmed 2p to 92p in brisk trading.
House of Fraser, the department store chain, added 9p to 192.5p on US investment presentations.
The Falkland Islands produced its own market explosion. Desire Petroleum's cautious statement about oil and gas shows in drillings off the islands provoked a stampede of interest with the shares gushing 96.5p to 305.5p. They arrived at 125p last month. Greenwich Resources and Westmount, with stakes in Desire were buoyant; Greenwich gained 5.25p to 28.75p and Westmount 33p to 190p. The excitement rubbed off on to the Falkland Islands company, up 28p at 176.5p. Its supply operations could benefit from any big South Atlantic strike. Cambridge Mineral Resources, with onshore exploration projects on the islands, firmed 0.25p to 12.25p.
Bid target Jeyes, the disinfectant group. hardened 8.5p to 265p as the Framlington investment group, clearly expecting an offer higher than the market price, picked up a 1.46 per cent stake.
Ambient Media and Eskmuir Properties made quiet debuts; Ambient, placed at 90p, closed at 92.5p and Eskmuir ended at 225p from a 220p placing.
On Ofex, Conroy Diamonds and Gold, run by Professor Richard Conroy, who found Ireland's Galmoy zinc mine, fell 2p to 67.5p. It raised pounds 510,000 through a private placing at 60p a share. The company believes it has discovered Ireland's first major gold mine in County Monahan.