European rate cuts power Footsie to record high; MARKET REPORT

Blue chips came close to breaking through the 3,900 barrier. The FT-SE 100 index closed at a peak, up 19 at 3,891.1, with hopes of lower interest rates providing much of the momentum.

There is a widely held belief that once Footsie climbs above 3,900 the magical 4,000 target would quickly fall.

This month, in admittedly unimpressive trading volumes, the index has climbed a remarkable 187.9. Often the stock market has looked taut and many experts have questioned the strength of the advance.

But unhelpful developments have been shrugged aside and the market has been content to dwell happily on more positive influences.

Yesterday it was the German interest rate cut. Other Europeans quickly followed. With the Bundesbank seen as having room for a further reduction and the Americans holding their rates earlier this week the chances of another UK cut have clearly improved.

The fall in retail sales in June, nipping hopes of a consumer boom, has also underlined the cheaper money argument.

The surge was not confined to blue chips. Second liners, as measured by the FT-SE 250 index, enjoyed another eventful session. The supporting index gained 15.1 to 4,402.5, taking its tantalising winning sequence to 17 sessions.

It is, however, still a long way from its record high - 4,568.5, hit in April.

Prudential Corporation, the insurance giant, had an active session, up 17p at 442p, with stories flowing about its Mercantile & General reinsurance arm. The Pru has said it intends to float M&G but some took the view the share offer would not take place - because the Pru had received a bid from another reinsurer which was too good to refuse. Another suggestion was that any flotation would occur much earlier than originally planned.

It had been thought M&G would be valued at around pounds 1.2bn in a market share sale with the Pru collecting pounds 500m whilst retaining a controlling stake.

BAT Industries was another active share - but it again headed south. The Clinton administration's move to classify nicotine as a regulated drug routed the price 24p to 422p, lowest for two years.

Hanson, planning to float its Imperial Tobacco group as part of its fourway demerger, has little representation in the US and any Clinton action would have little, if any, impact. The shares edged forward 3.5p to 162p.

BTR failed to respond to a buy suggestion from Panmure Gordon. The stockbroker expects the dividend to be cut next month - to 10.3p - but draws attention to a possible pounds 1bn disposal programme which should streamline and strengthen the group. The shares lost 3p to 250p.

Berisford, the Magnet group, was another in retreat - because of industrial action. A strike at its kitchen factory at Darlington lowered the shares 13p to 160p; they were 220p in June.

Zeneca, with a presentation rumoured, had another rousing session. In early trading the shares soared 24p. They closed 7p lower at 1,507p.

Ladbroke, up 2.5p to 203.5p, was helped by a Barclays de Zoete Wedd calculation the shares were worth nearly 250p.

Cable and Wireless, riding at 546p earlier this year as a BT merger seemed likely, gained 6p to 415.5p with a variety of rumours swirling round.

They ranged from an investment roadshow to an elaborate story that Granada could take on Cable's Mercury telephone network. Granada, up 6p to 857p, would then join the demerger bandwagon, splitting itself into two stand alone companies, one embracing leisure, the other media and telecommunications.

Interest rate considerations helped builders with the German cut encouraging RMC, up 23p to 1,075p, and Redland, 15p to 450p.

National Grid, responding to the Offer price proposals, gained 7p to 178p. Northern Electric glowed 16p to 544p, seemingly on dividend buying.

Albert Fisher, the food group, embarked on a round of investment meetings with a "no surprises" message. The shares were predictably unfazed, losing 0.5p to 45p.

Weir, the engineer, put on 18p to 234p as interim profits, although lower, came in above expectations but Dawson group reversed 41p to 125p following a 19.7 per cent interim setback.

Greenhills, the restaurant group, added 2p to 8p and Electronic Retailing Systems, AIM's only Nasdaq share, put on a further 15p to 218p; the shares of the group, supplying electronic shelf labelling systems for superstores, arrived at 145p in July.

Life and Style
tech
Sport
Farah returns to the track with something to prove
Commonwealth games
News
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
PROMOTED VIDEO
Sport
Shinji Kagawa and Reece James celebrate after the latter scores in Manchester United's 7-0 victory over LA Galaxy
football
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
film
Life and Style
fashion Designs are part of feminist art project by a British student
News
Very tasty: Vladimir Putin dining alone, perhaps sensibly
news
Life and Style
Listen here: Apple EarPods offer an alternative
techAre custom, 3D printed earbuds the solution?
Arts and Entertainment
Top guns: Cole advised the makers of Second World War film Fury, starring Brad Pitt
filmLt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a uniform
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
News
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
Arts and Entertainment
A scene from Shakespeare in Love at the Noel Coward Theatre
theatreReview: Shakespeare in Love has moments of sheer stage poetry mixed with effervescent fun
News
Joining forces: young British men feature in an Isis video in which they urge Islamists in the West to join them in Iraq and Syria
newsWill the young Britons fighting in Syria be allowed to return home and resume their lives?
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
books
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Transition Manager - Stirling - Banking - £400

£400 - £420 per day: Orgtel: IT Transition Manager - Banking - Scotland - £400...

Test Lead - Financial Reporting - Banking - London

£350 - £400 per day: Orgtel: Test Lead, London, Banking, Financial Reporting, ...

Business Analyst, Retail Bank, £375-400p/d

£375 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...

PMO Analyst - London - Banking - £350 - £400

£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...

Day In a Page

Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Should emergency hospital weddings be made easier for the terminally ill?

Farewell, my lovely

Should emergency hospital weddings be made easier?
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

Vladimir Putin employs a full-time food taster

John Walsh salutes those brave souls who have, throughout history, put their knives on the line
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
Will The Minerva Project - the first 'elite' American university to be launched in a century - change the face of higher learning?

Will The Minerva Project change the face of higher learning?

The university has no lecture halls, no debating societies, no sports teams and no fraternities. Instead, the 33 students who have made the cut at Minerva, will travel the world and change the face of higher learning
The 10 best pedicure products

Feet treat: 10 best pedicure products

Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
Commonwealth Games 2014: Great Scots! Planes and pipers welcome in Glasgow's Games

Commonwealth Games 2014

Great Scots! Planes and pipers welcome in Glasgow's Games
Jack Pitt-Brooke: Manchester City and Patrick Vieira make the right stand on racism

Jack Pitt-Brooke

Manchester City and Patrick Vieira make the right stand on racism
How Terry Newton tragedy made iron men seek help to tackle their psychological demons

How Newton tragedy made iron men seek help to tackle their psychological demons

Over a hundred rugby league players have contacted clinic to deal with mental challenges of game