Enterprise leads the way as oil groups spurt upwards; MARKET REPORT

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The Independent Online
Oils enjoyed an investment gusher as the stock market resumed its upwards and onwards march.

Spurred by the strength of the crude price, leading oil groups made headway although British Petroleum, which has hit new highs with almost monotonous regularity, was for once left in the cold.

It was the turn of Enterprise Oil to make the running. The shares jumped 14.5p to a 510.5p peak as Robert Fleming Securities was thought to underline its belief the shares will go to 600p.

Since its humiliating defeat at the hands of the Lasmo oil group, Enterprise, after a dutiful period of contrition, has recaptured its exuberance and adopted a higher City profile.

Elf Aquitaine, the French group which once had 26 per cent, sold its remaining interest earlier this year. But there has been no shortage of buyers with a number of institutions anxious to increase their involvement. The group has a portfolio of exciting overseas ventures; Italy is looking particularly promising.

With its shares at their highest for four years - they hit 686p in 1990 - it may not be long before Enterprise is tempted back into the takeover arena - although Lasmo is unlikely to be targeted again.

James Capel was responsible for BP's weakness, suggesting a switch into Shell. It was enough to lower BP 2p to 629p and lift Shell 12p to 961p.

Smaller oil groups joined the fun with Barclays De Zoete Wedd weighing in with some cheerful comments. Cairn Energy added 8p to 322p; Hardy Oil & Gas (regarded as the most likely takeover candidate) 4p to 274p and Tullow Oil 2p to 97.5p.

The FT-SE 100 index stretched to another peak - up 19.5 points to 3,883.2. The possibility of lower interest rates continues to enthral the stock market. Growing evidence the "feel-good factor" is seeping through and possibly developing into an economic boom is another thought which is stirring the market and encouraging talk of a heady run.

The supporting FT-SE 250 index, still a far cry from its peak, is, nevertheless, feeling the buying impact. It rose 17 points to 4,385.3 - its fifteenth consecutive gain.

However, with many big hitters still on holiday trading levels remain uninspiring. And the market looks fragile. It would not take much bearish news for it to turn on a sixpence and send the bulls scampering for the exit.

Railtrack, enjoying its first bull run, steamed ahead another 5.5p to 255.5p. Its 6.8 per cent dividend yield is drawing in institutions but there is also talk of property deals being inked in the next few weeks. In addition there is a nagging suspicion that after the takeover of Porterbrook, the rail leasing company, Railtrack may not be immune from corporate attention.

Retailers drew more inspiration from the Argos figures with Kingfisher up 14p at 668p. Great Universal Stores had the added support of hopes of a share buy back or special dividend, gaining 23p to 663p.

Bass frothed up in late trading - 13p to 836p - on talk the protracted deal over Carlsberg-Tetley had finally be concluded. Allied Domecq, owner of half of CT, gained 3p to 450p.

Grand Metropolitan jumped 15p to 477p, highest for two years. It is due to make an investment presentation on its food division today.

EMI managed a further 14p advance to 1,474p; Thorn gave further ground, off 2p at 389p.

Hazlewood, the food group, was ruffled by a 7.4 million delayed trade, easing 1p to 98p. Associated British Foods shaded to 402p as Henderson Crosthwaite expressed caution about pricing pressures.

British Gas firmed to 198p ahead of today's Ofgas pronouncement on its TransCo. unit's pricing policy.

Active Imagining produced the day's profit warning, falling 18p to 110p.

Pegasus, the computer group, slipped 2p to 393p. Bigger rival Sage has a hostile 425p-a-share bid on the table.

Refuge added 9p to 403p as Perpetual emerged as one of the fund managers nursing doubts about the terms of the proposed merger with United Friendly. Perpetual, which believes the deal undervalues Refuge, is due to meet the two insurance groups today.

Astec (BSR), the electrical equipment maker, gained 2.5p to 135p on talk of a Swedish bid. Costain, the hard pressed builder, fell 5p to 66p on reports it could lose its quote because of the dominating position of three main shareholders.

Hawtin, the sports equipment group, rose 1p to 48p. Stockbroker Wise Speke expects profits to improve pounds 600,000 to pounds 5.1m this year with pounds 5.9m likely next. It rates the shares a buy.