Financials lead blue chips to another peak

BLUE CHIPS stretched to another peak with Footsie climbing 94.2 points to 6,335.7 in heavy trading. At one time it was 118.8 higher.

The charge was led by financials, inspired by the rich pounds 1.9bn Prudential Corporation bid for the M&G unit trust group, and oils, rallying on the back of a firmer crude price.

The Dow Jones Average's seemingly relentless advance to the 10,000 points landmark was another supportive influence; so were the generally encouraging round of recent company results and, once again, the sheer weight of money available for investment. Tuesday's Budget was another factor.

The long expected takeover of M&G, which had been linked with an array of financial groups ranging from Halifax to Morgan Stanley sent the unit trust group's shares roaring 662.5p higher to a 2,450p peak - a remarkable 520p above the previous high.

Schroders, despite its frequent protestations that it intends to remain independent, romped ahead with the voting shares gaining 158p to 1,440p, well below their record, and the non voting 103p to 1,176p.

National Westminster Bank joined the cash party with a 73p addition to 1,486p and Barclays, down to 838p in October, jumped 79p to 1,893p, just 56p below the high point reached last summer.

Others to move ahead included Lloyds TSB, 40p to 980p, and Standard Chartered 36p to 926.5p. Perpetual, the fund manager, rose 412.5p to 4,042.5p and Amvescap added 27.5p to 646.5p. The Pru dipped 16.5p to 797.5p.

BP Amoco led the oil surge. The depressed sector, in the dumps as the crude price has collapsed, was inflamed by suggestions that Opec would later today sanction production cuts, which unsurprisingly prompted the crude price to strengthen. BP, which has suffered much less damage than other oil groups as tracker funds have been forced to increase their investments following the Amoco deal, flared 92p to a 1,021.5p peak. Shell, helped by buy-back plans, rose 33.75p to 396.75p.

Enterprise Oil, results today, put on 18.5p to 321.5p and Lasmo 15p to 135p.

The two are talking merger and there are hopes the Enterprise figures could be accompanied by details of a deal although it is known that Lasmo has other suitors. Among the smaller players Premier Oil rose 1.75p to 14.25p and Socco International 4p to 35p. Monument Oil & Gas gained 4.75p to 42.25p.

Supporting shares continued to recover although their indices are still well below their peaks. The mid-cap index gained 84.3 to 5,493.3 and the small cap 19.1 to 2,353.1. Market turnover was again above one billion shares, reaching more than 1.3 billion.

Other takeover bids helped generate the action. Besides M&G, a mid-cap constituent, Allied Leisure, unchanged at 27.5p, is bidding for European Leisure, up 19p to 92.5p, and paints maker Kalon improved 17.5p to 130p as 66 per cent shareholder, the French Total group, signalled it wanted full control.

Servisair, the aircraft support group, climbed 24.5p to 231p as a white knight, in the shape of another French group Penauille, appeared, trumping the hostile offer from Amey, the construction group. The French are offering 230p a share against Amey's 200p. It is thought they picked up shares in the market and with acceptances already have almost 50 per cent of Servisair's capital.

Saltire, a distributor of electronic components, firmed 2.75p to 7p on management buy-out talks. But not all deals are consummated. Packaging group Jarvis Porter fell 8p to 75p as bid discussions were called off.

And English China Clays at one time touched 232p on worries that the pounds 756m bid from the French Imetal group will be blocked; the shares ended unchanged at 234.5p against the 250p offer.

Signet, the jeweller, was the most heavily-traded share with Seaq putting turnover at 84.2 million shares with the price up 2.5p at 48.25p. SG Securities lifted its target price to 60p.

Scottish & Southern, the electricity group, slipped 13.5p to 532.5p as a large line of shares was placed.

RioTinto and Billiton were helped by firmer metal prices. Rio rose 44.5p to 872p and Billiton, ahead of an investment dinner with Schroders, gained 8p to 142.5p. Billiton, the South African group soon to be joined in the Footsie by South African Breweries, has held a series of investment meetings lately.

Reed International, the British publishing arm of Reed Elsevier, fell 32.25p to 532.5p on the no growth warning, and Rentokil Initial continued to weaken on the back of last week's figures.

Waters again displayed that sinking feeling on worries about the Government's signalled probe. Gallaher, the tobacco group on its way out of the Footsie, dropped another 11p to 381.25p on its acquisition of RJ Reynolds British cigarette business.

Builders, on results, moved ahead; construction group Keller firmed 26p to 238.5p after a 21 per cent profits advance. Engineers continued to strengthen with Glynwed International 16p higher at 227.5p. Chemicals were also firm. Laporte, ahead of figures next week, hardened 47.5p to 632.5p.

Mediakey, the publisher, rose 2.5p to 7.75p. It is in talks which may lead to a cash injection.The shares have come down from 71p. Geo Interactive Media gained a further 12.5p to 77.5p on stories of a link with Nokia. Reflex, the reflective inks group, firmed 1p to 6p after moving back into the black.

Peter Black, the fashion and healthcare products group, firmed 15p to 317.5p on indications that it is the distributor of Cellasene, the much heralded herbal cellulite pill launched this week.

A round of speculative interest lifted health-care group Tepnel Life 6p to 17.5p but Stylo, the shoe-shop chain, indicated more problems on the high street, falling 2.5p to 34.5p by forecasting increased losses. As befits an IT group these days Axon made a spectacular debut, closing at 254p from a 175p placing price. Dresdner Kleinwort Benson thinks the shares have further to go.

SEAQ VOLUME: 1.3bn

SEAQ TRADES: 98,946

GILTS: 115.04 +2.30