Footsie flirts with all-time high in brisk trading

MARKET REPORT

Share prices soared with the mercury in London yesterday, driving the leading FT-SE 100 share index tantalisingly close to the 3,500-level last attained 18 months ago. The all-time high was 3,520.3 set in February 1994.

The index closed exactly 50 points higher at 3,499.9, although its briefly touched 3,505 in mid-afternoon dealings. Volume trading was very good for the holiday season, with more than 874 million shares changing hands in 27,494 bargains.

Dealers said there were several factors behind the surge. They included the Japanese government's surprise relaxation of restrictions on institutions investing overseas, which unilaterally boosted the dollar and sterling in the currency markets; the Bank of England softening the tone of its concerns on inflation; and an unexpected improvement in the UK trade figures.

Investors also paid scant regard to the Bank maintaining that interest rates would have to rise to keep inflation in check, and took more notice of speculation that German rates may soon fall.

Rises in share prices were recorded from the opening bell and were given an additional boost in afternoon dealings from a strong opening on Wall Street.

The gossip pot for take-over bids also remained at boiling point, pushing several stocks sharply higher.

And fuel for the fire was provided by David Lloyd Leisure, up 15p to an all-time high of 324p on confirmation its was in bid talks.

Rank Organisation, ahead 8p to 430p, and First Leisure, down 1p to 324p, remain the market's favourite suitors for Lloyd, an operator of tennis and fitness clubs.

First Leisure tried to buy the company before it floated on the stock market just two years ago.

There is talk of a pounds 164m, 350p-a-share bid for Lloyd, and a long list of other potential predators, mainly the big guns in the brewing and pubs sector.

They are Whitbread, 3p firmer at 633p, which has virtually no borrowings and is expanding its leisure operations, Bass, 3p higher at an all-time high of 674p, and Boddington, also 3p better at 278p.

The latest big name to be added to an already long list of speculative bid targets is Mercury Asset Management, which was recently released from its parental ties when SG Warburg was bought by Swiss Bank. MAM climbed 18p to 837p, valuing the company at more than pounds 1.5bn. The bid rumour started early in the day, and centred on a possible offer by Munic Re which acquired a 4.5 per cent by converting its Warburg shares into MAM stock as part and parcel of Swiss Bank's take-over of the merchant bank.

The electricity sector was awash with yet more rumours of imminent takeovers despite fears the Monopolies and Mergers Commission might be asked to investigate the industry.

London Electricity stood out, rising 29p to 774p at which price it is valued at pounds 1.53bn. Pacific Light & Gas of the US was widely tipped as the predator in waiting.

Eastern Group rose 9p to 918p but remains well adrift of the 975p cash offer on the table from Hanson, up 2.5p to 216.25p. South West, on the end of an aggressive 900p bid from Southern Electric of the US, added 4p to 903p. Manweb eased another 1p to 867p, and looks increasingly likely in the market's eyes to lose its fight for independence against Scottish Power, up 2p to 318p.

Similarly, Smith & Nephew, rumoured to be in the acquisitive sights of Johnson & Johnson, gained 2p to 193p.

Zeneca, which has also featured strongly in recent bid rumours, advanced 9p to pounds 11.20. Interim results are due today. Analysts at NatWest Securities expect pre-tax profits to rise from pounds 451m to pounds 505m.

In electrical equipment, BICC closed 3p ahead at 330p on revived speculation of a bid from Siemens.

Best recorded rise of the day was Eurodis Electron, which returned from suspension following the deal with Electron House and promptly climbed 33p to 214p.

Among the main fallers was Airtours, the UK's second-largest tour operator. Shares fell 3p to a fresh year's low of 381p amid concerns that holiday companies will have to slash prices to clear their books of unsold holidays.

Late bookers using Airtours can now get pounds 100 each off selected brochure holidays, take children for pounds 1 each, and enjoy a 10 per cent discount on holidays to the US and other faraway destinations. Those who have already had a trip abroad can already get a 12 per cent discount off a winter ski holiday, and also book their sojourn on the slopes for only a pounds 5 deposit.

United Biscuits finished 3p better at 304p on hopes of a quick sale of Keebler snacks.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Call Centre Debt Collector - Multiple Roles

£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Guru Careers: Financial Director / FD / Senior Finance Manager

Up to 70k DOE: Guru Careers: We are seeking an experienced Financial Director ...

Recruitment Genius: Junior / Apprentice Sales Executives - OTE £50,000

£11000 - £50000 per annum: Recruitment Genius: This financial company offer ma...

SThree: Recruitment Consultant

competitive + incentives + uncapped comms: SThree: Did you know? 98% of our di...

Day In a Page

Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

The haunting of Shirley Jackson

Was the gothic author's life really as bleak as her fiction?
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

Tourists are limp, leaderless and distinctly UnAustralian

A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen