For the fifth day in succession trading exceeded the reputed break-even level of 500 million shares.
Turnover reached 987.8 million shares, which means that in the five sessions trading has topped five billion, much more than the volume achieved in many of the dull, listless accounts which have so vividly illustrated the decline of a once powerful stock market.
In the market they are toasting Norman Lamont as the best Chancellor since Denis (now Lord) Healey, whose stewardship of the economy produced a succession of thrills and spills but turned out to be good for shares.
The FT-SE share index ended 25.9 points higher at 2,586. The market was wilting before the Chancellor did what was expected, cutting base rate by one percentage point.
Once the lower borrowing cost was known the market ignored the pound - which actually performed quite well while most of the remaining ERM currencies had a torrid time as the union appeared to be about to crumble - and looked forward to the next cut. Another one percentage point reduction on the eve of the Tory Party conference was the popular guess.
The distressing trade figures were conveniently pushed to one side, with many prepared to dwell on the inflationary impact of the floating pound which was not seen as too damaging.
Interest rate-sensitive stocks, although many had anticipated the base rate cut, were nevertheless encouraged by the Chancellor's move. Internationals continued to edge forward on devaluation benefits. Imperial Chemical Industries again led the way, up 32p at 1,187p.
British Airways enjoyed a spectacular run, soaring 10p to 302p as the market got hold of a story that the Australian government had agreed 'due diligence' inquiries into Qantas, up for sale before the year-end. Other airlines, including Air New Zealand and Air Singapore, have been granted a similar facility.
BA is also seeking a link with USAir, where a decision is expected before the year end.
Troubled British Aerospace had an eventful session, ending 1p higher at 199p. Interim figures are due today and will make depressing reading. Foreign shareholdings, it revealed, have reached 23 per cent.
The upsurge in market activity continued to buoy financials. Kleinwort Benson rose 14p to 284p, Smith New Court 4p to 98p and S G Warburg 14p to 511p.
Action in the brewery sector, as the Whitbread group sold 'umbrella' shares, left Boddington Group unchanged at 174p, J A Devenish 1p higher at 240p and Marston Thompson & Evershed 3p down at 210p.
Whitbread low-voting 'A' shares ended 12p stronger at 436p and the brewery's Whitbread Investment Co associate 6p higher at 529p.
Queens Moat Houses, the hotel group which has been under pressure since poorly received interim results, had another difficult session as James Capel placed 10.5 million shares at 32p.
Worries about the German economy could have prompted the unloading. QMH, which has a string of German hotels, finished 5.5p down at 33.5p.
Granada Group edged forward 3p to 249p, with Carr Kitcat & Aitken saying buy. Booker, the food group, strengthened 20p to 282p as County NatWest adopted a positive approach.
British Petroleum was little changed at 219p. US investors remain firmly committed, declaring a near 19 per cent shareholding. Other oils were firm.
Blacks Leisure, the retail group, moved ahead 3p to 45p as interest in the shares strengthened. The price has climbed from 32p this month.
Storehouse gained 8p to 155p on the County enthusiasm and the Next trading revival lifted the shares 3.5p to 102.5p.
Lonrho rose 2.5p to 71.5p as the Malaysian Genting gaming group said its stake was 7.26 per cent.
Shandwick, the public relations group, continued to progress on the back of directors' share buying, reaching 13.5p, up 3.5p.
Estates & General held at 7p, seemingly unimpressed by two directors investing in almost 10 per cent of the capital.
Greycoat, the property group, dived 7p to 14p as a declared dividend payment was withdrawn.
Racal Electronics, ex Chubb, gained 7p to 141p. Chubb When Issued traded at 192p and the old Racal rose 0.75p to 66.5p.
Shares had another volatile session. At one time the FT-SE share index was down 14.9 points. It then scored a 38.3 gain before closing up 25.9 at 2,586. The FT 30-share index rose 22.3 to 1,910.1. Turnover was 987.8 million, with 29,992 bargains. Gilts experienced heavy switching from longs into index-linked. Shorts rose up to pounds 1.
Suggestions that the Anglo-Dutch publishing merger between Reed International and Elsevier would be called off if sterling continued to decline on the foreign exchange markets were dismissed yesterday. The original deal indicated Reed would have a 56 per cent interest. This could, however, be reduced by sterling's performance. Reed shares gained 14p to 557p.
A row is fermenting at Hoskins Brewery, one of the smallest quoted brewers. Privately-owned Ryan Elizabeth Holdings, a hotel and pub group, has built a 4.4 per cent stake and its chief executive Ritchie Cattermole appears to be seeking support from other shareholders, although he has yet to outlined any plans for taking control. Hoskins, based in Leicester, held at 41p.
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