Blue chips advance into the new year amid light trading
Saturday 03 January 1998
Even so, Footsie's display was in sharp contrast to the opening day of last year when the index fell 61.1. Then, of course, it went on to hit a succession of new highs, confounding most observers.
As Richard Kersley of BZW points out: "The strength of the bull run was missed by everyone. Most observers, ourselves included, began the year with a worried view of bond markets and saw equities in a similar light."
The opening advance looked fragile. A handful of buy orders, very little selling, more new year tips and futures interest provided sufficient incentive to push prices ahead. Turnover was an insignificant 130.7 million shares and the session was dubbed a "waste of time" by some market men.
Footsie gave ground in the last few minutes of trading. The fall, 10.3 points, was much less than on New Year's Eve when the index dropped 31.8 points before the Stock Exchange adjusted some share prices and a revised calculation was produced.
Halifax, one of the shares revalued upwards, was one of the few financial fallers. It lost 4p to 760p. Most, reflecting expectations of further takeover action this year, moved ahead. Abbey National, rarely far from corporate speculation, put on 23p to 1,114p.
Insurances pushed ahead. General Accident, lowered by 40p on New Year's Eve after the Stock Exchange rethink, had the audacity to recover all its imposed loss - gaining 40p to 1,095p. Other insurances higher included Prudential Corporation and Legal & General.
Retailers drew some comfort from the John Lewis trading statement which showed higher December sales bolstered by a late rush.
The January sales got off to a good start with double figure gains. It was enough to edge Next 16p higher to 708p and Marks & Spencer 5.5p to 604.5p.
Bass, selling its betting shops to Ladbroke for pounds 375.5m, put on 9.5p to 954p. The brewer is thought to be attempting to clinch a hotel take over. Ladbroke rose 4p to 268p.
Dalgety firmed to 279.5p. The sale of its food ingredients division is due to be announced this month. Cash rich Associated British Foods is thought to be interested but could run into monopoly problems.
Southern Electric, the only quoted survivor of the 12 regional electricity companies floated seven years ago, hardened 18p to a 524p peak. It is expected to attract a predator soon - possibly, if Westminster clearance can be obtained, one of the generators.
Others to attract modest interest on takeover hopes included Reckitt & Colman and Greenalls. R&C is regarded as a likely Unilever acquisition; Greenalls is seen as a possible target for Allied Domecq or even Whitbread.
There is a suggestion Allied and Bass could make a joint bid with Allied settling for the pubs and wholesaling operation and Bass the hotels. Any Whitbread assault would probably herald the end of the group's brewing involvement.
Nycomed Amersham led the Footsie leader board with a 100p gain to 2,250p. EMI, the showbiz group, gained 22p to 530p, reflecting a new year tip.
The arrival of an Information Technology sector continued to spur most of the 88 constituents. Logica hardened 20p to a 1,177.5p peak and Sherwood International also hit a high with a 40p gain to 572.5p. Misys, the sector's biggest company, put on 12.5p to 1,842,5p, also a record.
CNC Properties firmed to 85p. Channel Hotels and Properties and associates now control almost 30 per cent of the capital. Last year CNC, the old Clarke Nickolls & Coombs sweets business, disclosed a mystery takeover approach. One name in the frame was Wiggins, the property group. But the bidder walked away. Wiggins closed at a 13.25p peak.
Enviromed, the healthcare group where bidders are thought to lurk, fell 1.5p to 11p and Shield Diagnostic, last year's top performing share, gave up 22.5p to 695p on the inevitable take profits advice.
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