Worries about Japan and Asia, together with the possible backlash of the Far Eastern crisis on the world's economy and another soaraway display by sterling, unsettled equities. They also had to contend with the bearish comments of Eddie George, Governor of the Bank of England, who twice in the past few days has questioned the strength of the stock market.
With Hong Kong shares again weak and New York displaying little enthusiasm during London trading there was a compelling need for company cheer.
But no major groups were on the reporting schedule and most investment presentations only succeeded in deepening the gloom. The various counter- attractions, Wimbledon and so on, probably reduced trading.
So Footsie's closing fall to 5,712.4 was a relatively resilient display. It was at one time off 71.6. Supporting indices suffered sharper declines with the mid cap down 36.6 to 5,561.9 and the small cap 33.4 to 2,661.4.
The mid cap was hit by the decline in the hitherto high-flying pub chains following the Regent Inns debacle.
Regent's profit warning left its shares looking as flat as yesterday's pint - off 140p at 176.5p. They had fallen 72p last week as some clearly got wind of the tale of woe which was about to hit the market.
The pub chain's discomfort spilt over to JD Wetherspoon, where stockbroker Teather & Greenwood hoisted a sell sign, off 22.5p to 290.5p, and SFI, the old Surrey Free Inns, 10p down at 210.5p. Since March Wetherspoon has come down from a 341.5p peak; SFI was 235p last month.
Yates Brothers Wine Lodges, which also had to contend with director share sales, lost 24p to 497.5p. Enterprise Inns fell 13p to 359.5p and Slug & Lettuce 15p to 274.5p.
ScottishPower, off 1p to 520p, was one to give ground following a presentation; another was health care group Smith & Nephew, 2p lower at 155p. Investment house Dresdner Kleinwort Benson expects six-month profits of pounds 68m against pounds 81.1m. Reuters, the information group, bucked the trend, up 13p to 686p.
Stagecoach "celebrated" its arrival in Footsie with a 57p reverse to 1,363p. The bus and train group is taking a 41 per cent stake in Virgin Rail, a move which is seen as removing any early need for VR to float.
WPP, another Footsie newcomer, fell 20.25p to 391.75p as ABN Amro decided the shares were no longer undervalued.
Compass, the contract caterer, sizzled another 27p to 670p as takeover speculation refused to fade, even on such a down day.
Suggestions of an Alliance & Leicester merger with Woolwich induced excitement into the banking sector, with A&L up 22p to 797p and Woolwich 4p to 319p. But best levels were not held. At one time A&L was up 33p and Woolwich 27p.
Halifax, off 34p at 763p, ran into selling after Panmure Gordon took a negative view of the banks although it upgraded its stance on Lloyds TSB from hold to buy.
Orange, the mobile phone group, topped the blue chip leader board, up 28p to 551p. SBC Warburg dialled into the shares, suggesting they could go as high as 800p. Tariff cuts may be announced today. Pearson, the banker and publisher, fell 14p to 1,051p although Salomon Smith Barney set a 1,190p target.
It was not the best of days for a major engineer to make its debut. Alstom achieved an 8p premium at 2,050p in its when-issued form. Formerly GEC Alsthom, it was created nine years ago when General Electric Co and Alcatel of France merged some operations. Before the flotation GEC and Alcatel shared control. They now each have between 21 per cent and 24 per cent.
Save, the old Frost Group, was pumped up 22p to 135.5p as a bidder appeared for the petrol retailer. Cliveden put on 8.5p to 101.5p as American investment house Goldman Sachs, converting from a partnership into a quoted operation, signalled it too was interested in the upmarket hotelier. A consortium involving Bill Gates, the world's richest man, has already mounted a bid at 95p a share.
Leslie Wise, down 4p at 10.5p, has ended talks, started in February, with a would-be bidder, thought to be the Joe Bloggs jeans group. Talks to sell part of the group continue.
Claremont, the Marks & Spencer clothing supplier, rebounded 15p to 30p after Friday's shenanigans which saw the shares suspended for most of the day. Delayed results are due this week.
Rexam, the packaging and paper group, hardened 13p to 268p. A pounds 1.5bn break-up bid is mooted. The proposed deal, it is claimed, is planned for later this summer.
Enterprise Oil, 9p up at 550p, reported a "significant" discovery in the Gulf of Mexico. It sold a package of North Sea interests to an unquoted company for pounds 264m. The deal included Enterprise's stakes in the Piper, Claymore, Saltire and Scapa fields.
Young & Co's Brewery, the family controlled group resisting the attentions of Guinness Peat, continued to strengthen, reaching new highs. The voting "A"shares gained 2.5p to 792.5p and the non-voters 10p to 662.5p. Guinness Peat, an aggressive financial group headed by New Zealander Sir Ron Brierley, wants to shake up Young's capital structure, which in effect gives the Young and related families control.
Staveley Industries, also on the receiving end of GP attention, gained 4p to 116.5p. Responding to GP's demands that the salt side should be floated, Staveley said it was reviewing its options, including the GP suggested action.
FAIRFIELD ENTERPRISES, a supplier of packaging and printing machinery, is thought to be trading well and is likely to exceed market profit estimates. Interim profits, due next week, could be up 50 per cent and there are hopes the year's figures will emerge at more than pounds 3m against the pounds 2.3m hit last year and the pounds 2.6m forecast by stockbroker Teather & Greenwood. The shares are 143.5p. They were floated last year at 115p.
PRIMESIGHT, an outdoor advertising contractor, rose 12.5p to 192.5p. Entrepreneur Clive Richards has lifted his stake to 5.82 per cent.
PROPERTY GROUP Compco added 4p to 161.5p after profits of pounds 6.66m against pounds 2.82m. Net asset value this year is forecast to rise to 300p from 242p with rental income reaching pounds 8.5m.
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