Footsie and ICI sound a muted note

Market Report

IN DAYS gone by, Imperial Chemical Industries was regarded as the bellwether of Britain's economic health. It has since lost its barometer role, which is probably a relief to Westminster as its shares are signalling that the nation is already deep in recession.

They slumped 35p (after 63p) to 520p as the stock market digested the latest profits downgrade - from investment house Merrill Lynch

As word of the Merrill caution started to circulate on Monday, ICI fell 11p. Yesterday's decline took the once-proud chemical group to its lowest since the start of the 1990s.

Riding at 1,244p earlier this year, ICI has had a calamitous time. It created uproar when it was perceived to be nudging analysts' profits forecast lower, and then came in with a blunt profits warning which prompted some analysts to cut their year's forecast to pounds 400m.

Merrill has caused consternation by lowering its estimate to pounds 320m. Stockbroker Sutherlands, a bear on ICI even before the profits warning, is looking for pounds 300m.

Of course Merrill, a giant international US-owned securities house, carries more weight than Sutherlands, a modest London operation. What nagged at the market was the assertion by Merrill analysts Robyn Coombs and Judy Shaw that ICI's more glamorous specialty chemicals side was starting to feel the strain.

ICI banked heavily on transforming itself from a largely bulk chemical business into one enjoying specialty status. Last year it sold bulk operations and splashed out pounds 5bn on specialty businesses which were unloaded by Unilever, the Anglo Dutch giant. Judging from the Merrill comments, the specialty side offered only short-lived salvation and is now feeling a pinch as severe as ICI's rump bulk chemical operations. There are worries that ICI is having difficulty selling its remaining unwanted parts at anything near the price it once anticipated. Martin Evans at Sutherlands says: "The high level of gearing is a major overhang on sentiment."

The rest of the Footsie army spent most of the session in ragged retreat, with the index off 76.1 points at one time. New York helped to smooth ruffled feathers and Footsie ended 13.1 higher at 5,281.7. Supporting shares remained in the doldrums.

Next, the fashion retailer, had an eventful time, ending unchanged at 436p. It was hit by a CSFB sell, with the investment house suggesting interim profits would emerge at pounds 45m against hopes of pounds 49m.

JJB Sports, the retailer which raised pounds 105m at 440p a share towards the pounds 290m takeover of its Sports Division rival, slumped 35p to 320p, lowest since last year, on worries about the growth prospects for the sports- kit selling business.

Kenwood Appliances went to a year's high, up 9.5p to 147.5p, as hopes grew that the hard pressed kitchen equipment group will soon attract a predator. Pifco has made no secret of its takeover ambitions but there is a growing suspicion it will find itself pipped at the post by an Irish bidder.

Robert Walters, the recruitment group which has bowed to a US offer, rose 10p to 316p on the share interest displayed by rival PSD, which lifted its interest to 2.2 per cent. PSD, which said its share stake "kept its options open", slipped 5p to 326.5p.

Reuters, on Warburg Dillon Read support, improved a further 30p to 509p but Centrica fell 4p to 105p as Greig Middleton said sell because the shares were running ahead of the company's transformation.

Hanson, the building materials group, responded to WDR support with a 10p gain to 343p and Cable & Wireless, 20p up at 570p, was helped by cost cutting exercises at its 53 per cent-owned Hong Kong Telecom offshoot.

Lasmo, due to make presentations to fund managers about its South American operations, rose 3p to 171p and chemical group BTP, thought to be arranging an analysts' trip to the US, lost 8p to 369.5p. Metal Bulletin, the publisher, is another on the analyst trail, holding at 1,215p.

HSBC downgraded Royal Bank of Scotland. It lowered its estimates from pounds 1.03bn to pounds 907m. But the investment house continues to recommend the shares although the price fell 14p to 755p. Booker, rejected by Budgens, slumped 28p to 117.5p, a 14-year low. The struggling cash-and-carry chain had already been spurned by Somerfield.

Another bid emerged in the depressed textile sector, with Worthington descending on Jerome, up 11.5p to 45p. The bidder seems home and dry with acceptances representing 46.62 per cent of the capital. The bidder shaded 1p to 651.5p.

Celsis International, the drugs group, firmed 3p to 25p. A bid is expected. Some say a price of 40p has been agreed. The company said in June it had received bid approaches. Emerald Energy, seeking oil in Colombia, rose 1p to 8.5p: Seaq put turnover at 51 million shares.

SEAQ VOLUME: 816.8 million

SEAQ TRADES: 57,546

GILTS INDEX: n/a Dentmaster, specialising in car damage repairs, rose 1p to 4.5p after producing profits up nearly 30 per cent at pounds 685,000. The market expects pounds 840,000 this year. The group, controlled by chairman Lance Leonhardt, is looking for acquisitions and hopes to complete deals in its current year. It already has extensive Continental operations. The shares, which arrived two years ago, hit a 6p peak earlier this year. Expect more outstanding growth from European Sales Finance. Profits for the year, due to be announced next week, are likely to emerge at around pounds 1.3m against almost pounds 600,000 last time. The group, which is setting up shop in Germany, is planning to move from the AIM to a full listing. The shares held at 282.5p. They have been as high as 380p, but three years ago they were bumping along at 117.5p.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
News
Starting the day with a three-egg omelette could make people more charitable, according to new research
science
News
Top Gun actor Val Kilmer lost his small claims court battle in Van Nuys with the landlord of his Malibu mansion to get back his deposit after wallpapering over the kitchen cabinets
people
News
Comedian Ted Robbins collapsed on stage during a performance of Phoenix Nights Live at Manchester Arena (Rex)
people
News
The actress Geraldine McEwan was perhaps best known for playing Agatha Christie's detective, Miss Marple (Rex)
peopleShe won a Bafta in 1991 for her role in Oranges Are Not The Only Fruit
News
newsPatrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
News
Robert Fraser, aka Groovy Bob
peopleA new show honours Robert Fraser, one of the era's forgotten players
Life and Style
Torsten Sherwood's Noook is a simple construction toy for creating mini-architecture
tech
Sport
David Silva celebrates with Sergio Aguero after equalising against Chelsea
footballChelsea 1 Manchester City 1
ebooks
ebooksA special investigation by Andy McSmith
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

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links