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The FTSE 100 index continued to surge ahead last week, and finished on Friday at a new high of 3,907.5. Over the we...
The FTSE 100 index continued to surge ahead last week, and finished on Friday at a new high of 3,907.5. Over the week the FTSE 100 index rose 34.6 points, nearly one per cent. Since mid-July the index has gained 275 points.

The UK equity market responded well to news from the US that interest rates would not be raised, (for the time being), as well as news of a surprise interest rate cut in Germany, which sparked off similar moves across Europe.

Corporate activity will be the main focus of attention for the equity market this week, in the absence of much domestic economic news. There will be results from the leisure company, Ladbroke, the engineering companies Rolls-Royce and T&N, retailer WH Smith and the household goods company Reckitt & Colman.

Corporate performance remains mixed. For instance, Ladbroke's results, on Thursday, should reflect the resurgence in hotel business, whereas T & N results, also on Thursday, will be poor, overshadowed by weak manufacturing sector activity.

For some time now there has been evidence of a 'two-speed' economy in the UK, with the consumer sector rebounding but the industrial sector remaining subdued, held back by very high stock levels. As a result consumer stocks have been outperforming shares in industrial companies over the past year or so.

However, there is now evidence, especially from forward looking manufacturing sector surveys, that sentiment is turning. Industrial company shares should now begin to perform much better, as firms rid themselves of unwanted inventory and begin to meet rising demand from new production.

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