Footsie takes cue from Wall Street and breaks 4,400; MARKET REPORT

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The Independent Online
Shares broke decisively through the 4,400 barrier on the FTSE 100 index yesterday, ending 21 points ahead at a new closing high of 4,420.3. The stock market took its cue from Wall Street, where the Dow Jones index had powered up over 50 points to hit the magic 7,000 level by late afternoon trading in London.

The storming end to the day came after dealers sat on their hands for most of the morning, waiting for the release of key US unemployment figures relating to non-farm payrolls. These are being seen as giving a crucial pointer to which way Alan Greenspan, Federal Reserve chairman, will move on interest rates at the Fed's meeting later this month.

In the event, when the statistics came through at lunchtime they gave mixed signals, with the February payroll figures coming in ahead of expectations, while hourly earnings figures were weaker. After some hesitation, the market decided the figures lessened the likelihood of a rate rise, with both gilts and shares joining in the surge.

But analysts urged caution. Richard Kersley, strategist at Barclays de Zoete Wedd, commented: "The first reaction to figures is usually the wrong one. On the surface, the US numbers seem strong to us. I would have thought the market would have taken it a lot worse than it has done." Economists warned that the pressure to raise rates remained.

That did not trouble the London market, however, with many companies benefiting from a positive carry-over from results on Thursday. BTR was the best performer in the Footsie, climbing 16.5p to 276p on signs that sentiment may be changing towards the formerly unloved conglomerate.

Glaxo Wellcome, up another 39.5p to a new peak of pounds 10.885, bathed in a sea of buy recommendations after promising double digit growth in 1999 the day before.

GKN wrongfooted many dealers, surging 46p to pounds 10.20 despite the announcement late of Thursday of a record $601m damages award against the company in the US. Brokers breathed a sigh of relief, saying it could have been $800m.

Bid hopes buoyed Rank, up 8.5p at 444p, and Ladbroke, where rumours of a bid from Hilton Corporation were revived. The shares put on 7p to 243p. However, another bid hopeful, Reckitt & Colman, fell back 16p to 807.5p after ABN Amro Hoare Govett lowered its recommendation from buy to "undervalued".

BSkyB was also a casualty, ending 7p off at 616.5p after it pulled out of a pay-television joint venture with Germany's Kirch Group.

Some of the few results of the day saw Torex, the tool hire turned computer services group, rise 6.5p to 76.5p after announcing a 178 per cent increase in profits. Greggs, the north-east bakery group, was also in fine fettle, gaining 125p to pounds 16.45 after profits up a fifth.

Football stocks had a mixed end to the week. Birmingham City's debut on the Alternative Investment Market left many punters happy, with the shares ending the day at 58p, a comfortable 8p premium to its launch price. Chelsea Village, owner of the London club, climbed 13.5p to 133.5p. But elsewhere, adverse press comment put Manchester United under pressure, with the 10p fall to 647.5p wiping out the previous day's gain.

Meanwhile, another 6.5p slide to 145p at Hay & Robertson, owner of the El Tel brand of replica football jerseys, forced it to issue a statement saying it had no reason to explain the fall in the group's shares over the past few days. A month ago, they stood at 178.5p. Dealers blamed profit taking by small investors.

JKX Oil & Gas, the oil exploration tiddler chaired by former BP boss Sir Robert Horton, fell to a new low yesterday, diving 6p to 49p. The group has been under the cosh since announcing a pounds 14m rights and deeper losses last week.

Roger Carey, who resigned as joint managing director of Slough Estates last year, popped up yesterday at the much smaller J Saville Gordon. In what looks like a reverse takeover, JSG is buying Rutland Industrial Estates, a property vehicle for Mr Carey and partner James McAllister, along with two industrial portfolios totalling pounds 46.3m. Despite the accompanying rights at 55p a share, JSG slipped just 0.5p to 60p.

The placing of the late Viscountess Rothermere's 10.8 per cent stake in Daily Mail & General Trust, the newspaper group, went through smoothly in the hands of brokers UBS and Cazenove. The pounds 15.80 realised for the A shares was at a tight discount to the pounds 15.975 at which the shares stood when the deal was announced earlier in the week and on Thursday. They ended down just 5p at pounds 15.925.