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FTSE closes higher 2.2 pc as growth stocks shine LONDON: The FTSE 100 closed sharply higher on Wednesday as sought-after stocks in the high growth technology, media and telecoms sectors turned in yet another a strong performance.

Ending a three day falling run and bouncing off its second lowest close of the year, the blue chip index ended up 129.4 points or 2.2 percent at 6,144.1, having found support away from the psychological 6,000 level right from the opening bell.

The index touched a session high at 6,167.3 amid widespread relief that the second slice of Alan Greenspan's Humphrey-Hawkins testimony sprang no new nasty surprises, but a 120 point slide by the Dow rubbed some of the shine off the London market in the dying minutes.

Overall volume was slightly lower than last week's average, with many market players opting for a half-term with the children, dealers said, but still topped 1.95 billion shares by the official 1630 GMT close of trade. Business software group Sage was the highest climber, with a 15.6 percent rise sparked by news of big deals and bigger revenues from sector peer Logica , which closed up eight percent, but the real power behind the FTSE came from index heavyweights Vodafone and British Telecommunications .

Although only 1.5 percent higher at the close, Vodafone's gains translated into some 13 FTSE points, while BT, extending this week's rally by another 6.6 percent, contributed 22 points.

The FTSE's rise was more broad-based than in recent sessions, with some 70 stocks ending the day in positive territory.

But even though this was a welcome change from the harsh split between "old" and "new" companies that has typified the London market in recent weeks, Credit Suisse First Boston equity strategist Paul O'Connor said the FTSE was still being driven by too small a group of stocks.

"It's good to see more stocks climbing, but it's not quite as healthy as it looks at first. Once again we've relied on just the growth stocks to lead us up," O'Connor said. London's fledgling techMARK 100 index chalked up a record close at 4,997.6, having earlier moved above 5,000 for the second time in its four-month life, even though investor darling and imminent FTSE 100 member Baltimore Technologies fell 12.5 percent.

The company announced higher annual earnings and a product deal with U.S. giant Compaq Computer Corp but dealers said demanding investors wanted more, choosing to take profits instead.

Pearson led a surge from the highly-rated media sector, closing up 12.6 points and marking an end to a two-week run of profit-taking. Reuters , WPP and United News & Media all showed gains of 7.5 percent or more, to put four media stocks in the FTSE's Top 10 performance chart.

As a group, London's media stocks have almost doubled in value since last October and outperform the FTSE All share index by 33 percent.

But O'Connor said the astonishing bull run for "new economy" stocks could not go on forever.

"They are looking ever more expensive, both technically and fundamentally, and I'm finding it harder and harder to buy them," he said.

Instead, investors can now pick up high yielding bargains at the other end of the market, he said, away from the glitz and hype of the Internet.

Underlining the point, many of the heaviest blue chip fallers on Wednesday -- Scottish & Newcastle , Railtrack , Centrica , ICI -- come from the more traditional areas of the economy.

And when the frenzied scramble by tracker funds to load up with Vodafone shares has faded away -- probably in a week or so -- O'Connor said the long-awaited rally by defensives would arrive, noting that it is already hit the U.S., which has not suffered the one-off skew of a Vodafone.

"In the current world of short-term interest rates going up the market would normally be rotating towards defensives, but in the UK that consideration has been totally smothered by people focusing on stocking up with Vodafone," he said. Away from the domestic value versus growth debate, two of South Africa's largest companies, life assurer Old Mutual and South African Breweries both saw their shares climb more than six percent as investors applauded the country's business friendly budget.

Despite the widespread gains, chart analyst Richard Marshall at Investment Research of Cambridge said the FTSE 100 needed to close above 6,210 to break the prevailing bearish trend.

London's lesser stocks also enjoyed a positive session, the midcap index climbing 0.7 percent, although was somewhat overshadowed by a 0.3 percent rise by the SmallCap index to its second straight record close.-Reuters