The Vodafone swoop on AirTouch Communications and receding worries about Brazil and the rest of Latin America had the stock market in an ebullient mood from the opening bell. New York's closure, so often an excuse for inactivity, was ignored.
Footsie made headway throughout the session, with institutions clamouring to buy telecoms shares. But the undercard, if not neglected, was given only grudging support: The mid cap index added 46.7 points to 4,903.8 but the small cap was just 5.9 up at 2,106.
Telecoms led the charge, with speculators looking for the next round of corporate action. They took the first three places on the Footsie leader board. Vodafone charged 157p higher (after 195.5p) to 1,225.5p, with Seaq putting volume at more than 80 million shares. Orange jumped 147.5p to 1,071.5p and Colt Telecom hit 1,2l5p with a 145p gain.
Vodafone's spectacular US strike will send the British mobile phone group plunging into the red. Still, it will be in good company: Orange and Colt have yet to see any sign of profits. Indeed Orange is expected to make its first profit this year - a mere pounds 20m - and Colt is not due to get into the black until some time after the millennium: investment house BT Alex.Brown forecasts a loss of pounds 59m for last year, pounds 84.7m for this year and pounds 85.6m for next.
Yet Colt's capitalisation exceeds pounds 7bn - some pounds 2bn more than Allied Domecq, which - despite its trials and tribulations - should be set for profits of around pounds 580m this year.
The Footsie pattern of recent weeks is threatening to make the blue-chip index top heavy. It is likely that soon a few more than a dozen shares will account for more than half of Footsie's valuation, leaving some of its constituents near the pauper category.
Other telecoms stars included Telewest Communications, Cable & Wireless and BT. Standard Chartered and Barclays ensured that banks, relieved by the more relaxed atmosphere over Brazil, were in the fore of the advance, with Standard up 63.5p to 825p.
Stagecoach, the transport group, was one of the less fashionable Footsie constituents to mix it with the glamour stocks. Its planned pounds 181m acquisition of Hong Kong's Citybus drove the shares 18.25p forward to 240.25p. Warburg Dillon Read and HSBC placed shares conditionally, raising pounds 140m.
PowerGen was powered 56p higher to 905p by Merrill Lynch suggesting a 1,000p price tag.
British Aerospace and General Electric Co. confirmed they were in talks, presumably aimed at BAe buying Marconi from GEC for a pounds 16bn. The proposed deal failed to excite and BAe was the weakest Footsie constituent, falling 25.5p to 493.5p on worries that its GEC alliance will damage prospects of linking up with other defence groups. GEC rose 8p to 577.5p.
Mirror, the newspaper publisher, rose 32.5p to 206p as Regional Independent Media appeared as a possible bidder with an indicated offer of 200p a share. The prospect of Trinity, the publisher that has been talking off and on with Mirror, topping the RIM shot was behind the excitement, which was helped by Phillips & Drew's preference for shares rather than cash. The fund manager has 21.9 per cent of Mirror.
LucasVarity, which has said it is in talks with several companies, put on 10p to 225p. Federal Mogul, the US group which acquired T&N, was reported to be considering a pounds 3.5bn strike.
Shield Diagnostic held at 520p after its takeover of Axis Biochemicals of Norway to create a pounds 177m group. Most speculators had expected a bid for Shield.
Calderburn, the furniture group, added 16p to 58.5p after saying it was involved in bid and disposal talks. Watts Blake Bearns, a ball clay producer, rose 95p to 477.5p following talks with its major shareholder, Sibelco of Belgium.
Tesco, despite an encouraging trading statement, fell 8.25p to 187.25p and Dixons settled 22p lower at 1,036.5p after its heady run.
Building materials hit a brick wall, with RMC down 24p to 609p and Blue Circle Industries off 10.5p to 281p. BCI is thought to have been in talks with stockbrokers, which prompted profit downgrades.
Inchcape was given an early spin on stories of more disposals. At one time the shares were up 12p but the failure of any deal to materialise left the price just 6.5p higher at 136.5p.
On-Line, the computer games group, made further headway, hitting 133.5p, up 26p, and hopes of corporate developments lifted Cortecs, the drugs struggler, 3.25p to 31.75p.
Bigger losses from African Gold lowered the shares 1.25p to 2.25p. Blakes Clothing was threadbare, off 3.5p to 7p on a disappointing trading statement. Rumours of a Nokia contract sent Vocalis, the IT group, 18.5p higher at 70.5p.
SEAQ VOLUME: 1.08bn
SEAQ TRADES: 88,907
GILTS INDEX: 116.1 -0.09
SHARES OF Proteome Sciences, a biotechnology group, were on a high after saying its US unit had come up with a method for repairing damage caused by cystic fibrosis. It added that its technology may be suitable for cancer and HIV. The shares rose 7.25p to 17p. When the firm was known as Electrophoretics and its main claim to fame was a potential BSE test, they were nearly 200p; flotation price was 160p.
THE INFORMATION group, Reuters, firmed to 795.5p, a 12-month high, as Merrill Lynch suggested that year's profits next month would be pounds 570.5m, down from pounds 634m. Not much progress is expected this year and next: Merrill worries that the "competitive framework is becoming more fierce". Still, the investment house moves its stance to neutral, a modest upgrading.Reuse content