Footsie follows New York's surge in hectic trading

MARKET REPORT

At long last the stock market, perhaps only briefly, is clinging to New York's coat-tails. Another determined transatlantic surge, lifting the Dow Jones Average to a peak, was for once given a favourable reception rather than the surly indifference which has so often greeted high-powered US share displays.

Footsie jumped more than 50 points to within a few points of its high, hit on the final day of last year. Despite its sudden display of strength it is still lagging a long way behind its New York counterpart.

One of the mysteries of the 1990s, at least in the eyes of market followers, is the yawning gap which has opened between the blue chip share measurement of New York and London.

In the past few months there have been attempts to explain the gulf by describing New York as grotesquely overvalued and suggesting it is sure to suffer a corrective slump today, tomorrow or sometime soon.

As if defying gravity the stretched New York stock market, said to be overheated by Alan Greeenspan, the US banking chief, has continued to romp ahead and was again hitting new peaks during London's opening.

Tokyo's misfortunes in the past few days have made little impact; even so the overnight rebound was welcomed and added to the market's confidence.

The latest Whitehall statistics and the mixed bag of festive trading statements combined to strengthen the belief that interest rates are likely to remain unchanged after this week's Ken and Eddie meeting.

Footsie closed 50.7 points higher, its best one-day gain since November, at 4,107.3, just 11.2 below its record level. Trading was again often hectic with turnover, for the second consecutive trading day, topping 1 billion shares.

Banks, oils and power shares led the charge. The market view is that anyone with reasonable intelligence should be able to successfully run a bank these days and it seems the merest flip of encouragement can produce sharp price movements.

So Credit Lyonnais Laing support lifted Bank of Scotland 11.5p to 30.8.5p and Royal Bank of Scotland 11p to 568.5p. Abbey National, Barclays, National Westminster and even often-overlooked Lloyds TSB also moved ahead.

Oils remained under the whip of takeover speculation and the firming oil price. Weather forecasts pointing to some cold spells, particularly in the US, kept the crude price bubbling and action over Clyde Petroleum was enough to alert the market to the possibility of more takeover action. Lasmo was again strong, up 7.5p to 251p. Cairn Energy, however, had its own agenda. Its latest deal with the Bangladeshi authorities lifted the shares 36p to a 521.5p peak.

On the generating front National Power surged another 14.5p to 493p and PowerGen edged ahead 5.5p to 601.5p. Awaiting the seemingly inevitable strikes, Southern Electricity rose 7.5p to 786.5p and Yorkshire Electricity 4p to 799p.

Festive trading statements had predictable impacts. A flat discourse from the Whitbread brewing and leisure group eroded the shares 21.5p to 740p; Next, with the now expected upbeat statement, put on 12.5p to 541.5p.

Currency influences again undermined some, such as Siebe, the engineering group, off 13.5p to 1,014p. Besides currency worries RMC, the building materials group, had to contend with the recent run of poor weather, leaving the shares down 16p at 887.5p. A profit warning from civil engineer Birse late on Friday claimed a 5.5p fall to 19.75p.

Lloyds Chemists fell 1.5p to 525p as UniChem retired from the bid battle, leaving the way clear for Gehe, the German group. Unichem added 13.5p to 269.5p.

Cable & Wireless, on worries about its cable build-up, shaded 4p to 465.5p but Cookson, on Barclays de Zoete Wedd and NatWest Securities support, rose 3.5p to 251p.

Legal & General, the insurer, had another rousing session, up 14.5p to 393.5p. M&G, the unit trust group, rose 31p to 1,230p.

3i, the investment group gained 3p to 498.5p, a peak, as Barclays, one of its it original shareholders, sold its remaining stake, 2.1 per cent, at 490p. The pounds 59m deal produced a pounds 42m profit for the banking group.

Gieves, the clothing group, fell another 2p to 47p following its profit warning and criticism of its involvement in the Knickerbox lingerie chain.

Westmount, the oil explorer, rose 2p to 47.5p. It has pumped pounds 344,000 into Desire Petroleum, seeking oil and gas around the Falklands, and placed 325,000 shares, raising pounds 130,000.

Taking Stock

Darby, a specialist glass group holding at a 117.5p peak, is trading well but remains a favourite takeover target. It said in the summer it had received approaches but denied it was then involved in takeover talks. Pilkington, Saint Gobain of France and the US PPG group are among the groups linked with Darby. Its interim profits emerged at pounds 880,000 and around pounds 2.25m is expected for last year. The current year could produce pounds 3.5m.

Troubled Lionheart, being developed as a bathroom accessories company by new chief executive Mark Flatman (ex-Courtaulds Textiles), has attracted increased backing from Schroders. The investment group, perhaps averaging down, has picked up 4.6 million shares, lifting its stake to 19.49 per cent. The price gained 0.5p to 8.25p.

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