News of Britain's first monthly foreign trade surplus in five years sparked a boom on the London Stock Exchange today that took industrial shares to an alltime high.
The Financial Times index of 30 leading industrials jumped 8.1 points to 544.1 shortly before the market's close. The previous closing high was 543.6 in May 1972.
The rise in stock and bond prices accelerated in afterhours trading following news that the United Kingdom registered a 141 million pound visible trade surplus (about $245.3 million) in August, as well as record 316 million pound (about $349.8 million) current account (overall trade) surplus.
A foreign exchange dealer said the Bank of England continued to sell sterling at $1,7444 to keep it from rising after the trade surplus announcement was issued.
The central bank also reportedly signaled the money market's discount sector to moderate the present fall in short-term interest rates.
Traders said they weren't sure whether this means that the bank would allow a 0.25 per cent cut in the minimum lending rate Friday or not. One dealer said it appeared likely that such a reduction, if any, would be the maximum.
The bank's message was coupled with week-long direct loans to six or seven of the 11 discount houses by the Bank of England.
On the London Stock Exchange, British government securities jumped with shorter-term issues, gaining the equivalent of $2.60, while long-term issues were up about $1.74.