Footsie touches new record as Wall St rallies
Saturday 09 January 1999
The exuberant mood was sustained by rumours of a bid for Cable & Wireless by Deutsche Telekom. C&W stock initially leapt 89p in heavy volume and later closed at 888.5), up 9.2 per cent. Talk was that BT Alex Brown had been hired to offer Cable & Wireless to potential buyers at 1,050p per share. An emphatic denial by C&W did little to dampen enthusiasm.
The telecoms sector has already caught takeover fever in the wake of the bid battle for AirTouch, the US mobile operator, and unexpectedly good pre-Christmas sales figures. The fever was infectious yesterday and temperatures rose at Orange, where shares jumped more than 5.5 per cent to hit 945p by the close. Orange's share price is now over 100p higher than it was during the go-go days of July last year.
As of last night it was outperforming the All-Share by 300 per cent. Telewest also caught the bug, rising 5.4 per cent to close at 216p.
Turnover was heavy. SEAQ said more than 1 billion shares had been traded by the 4.30pm close. Following Wednesday's party and Thursday's hangover, traders were relieved to see Wall Street rallying overnight. The rally continued when Wall Street opened at 2.30pm, albeit in a more temperate way. The Dow was up 48 points at 9585 by 4pm.
Mid and small-cap stocks predictably saw less of the action, with the FTSE 250 closing up 29.7 at 4976.4. The FTSE Small Cap index settled up 14.2 at 2133.8.
Brewers joined in the revelry as Marston, Thompson and Evershed launched its audacious counter-bid for Wolverhampton & Dudley. But the uncertainty over the outcome of the battle sowed some caution among traders. At 597p, the Marston bid would represent a 35 per cent premium, a cause for scepticism. Wolverhampton jumped nearly 20 per cent, or 72.5 points, to close at 510p.
Scottish & Newcastle raced ahead in sympathy with the takeover activity, jumping 37p to close at 745p. SFI Group, the UK pub operator that owns the Bar-Med brand, jumped 15.5p to 173p, celebrating in style the news that like-for-like sales were up 5 per cent in the four weeks over Christmas.
Diageo jumped 40.5p, or 6.1 per cent, to 705.5p. It was helped by the generous sales price for rival food and drinks operator Cantrell & Cochrane. Standard Chartered rose 47p to 836p on news of a cut in Hong Kong's deposit rate.
Continued hopes of a takeover gave a renewed boost to Acorn, the computer group, which rose nearly 10 per cent to 113.5p. Somerfield, the struggling retailer, jumped 11p to 457.5p after Morgan Stanley reiterated its strong "buy" stance ahead of interim results.
The Millennium, for once, was a cause of optimism. Compass and Granada , both of which have secured big Millennium-related contracts, jumped 8.5 and 6 per cent respectively.
The party-poopers were few, but Reckitt & Colman, the household goods and textiles group, was not coming out to play. Credit Suisse First Boston slashed its forecasts over the next two years, causing Reckitt to tumble 34.5p to 720p by the close. Tomkins, the buns-to-guns conglomerate, was another wallflower. Shareholders are nervous ahead of the group's results next week and analysts are known to be pressing for the group to sell its baking division and concentrate on autoparts.
RMC group, the cement manufacturer, came crashing down as investors digested a profits warning. RMC said its business had been battered by a slump in demand for construction materials in Germany and Israel that would take a heavy toll on full-year profits. Analysts are now predicting current- year profits of pounds 265m at the most - at least pounds 30m less than expected. The shares fell 59p to 693p.
Shares in retailers headed in different directions as the market tried to guess the outcome of some crucial trading statements happening next week.
Kingfisher, in particular, must be wondering where Santa Claus went. The stock slid 26p to 668p on rumours that a trading statement next week would be gloomy. But the owner of Woolworths, B&Q, Comet and Superdrug is not as vulnerable as some think, according to Verdict, the respected UK retail consultancy. The stock may be oversold.
By contrast, Dixons, a direct competitor of Comet's, rose 2.5 per cent after Schroders reiterated its "add" recommendation. Other retailers, including Somerfield (up 12p to 458.5p), rose ahead of the market.
TOREX, the medical software systems specialist, rose 17 per cent as traders awoke to the fact it looks relatively recession-proof.
While many companies sell IT stocks to companies in cyclical sectors, Torex's customer base is relatively robust. A strong "buy" note from the house broker, Beeson Gregory, also helped the shares to end up 15.5p at 103.5p.
REXAM, the packaging group, made courageous attempts to extract itself from the despondency surrounding the sector, which suffers from a big overcapacity problem.
After meeting more than 20 institutions, Rolf Borjesson, chief executive, put his money where his mouth was by buying 50,000 shares. The stock rose 16p to close at 182p yesterday.
Children's bookseller wins The Independent's new author search
Board creates magnetic field to achieve lift
- 1 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 2 Banksy arrest hoax: Internet duped by fake online report claiming artist's identity has been revealed
- 3 Former East 17 frontman Brian Harvey turns up at Downing Street and 'demands to speak to Prime Minister'
- 4 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
- 5 Paralysed man Darek Fidyka walks again after treatment by British doctors on brink of 'cure'
Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
Oscar de la Renta dead: Legendary US fashion designer dies after long cancer battle aged 82
Oscar Pistorius: The brutal prison life that awaits disgraced athlete
Banksy arrest hoax: Internet duped by fake online report claiming artist's identity has been revealed
Super-sized ships arrive in Britain: How big can they get?
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
Jose Manuel Barroso warns David Cameron against making 'historic mistake' over immigration reforms
Worst Airports of 2014: Poll names Islamabad airport in Pakistan worst in the world
iJobs Money & Business
£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...
£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...
£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...
£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...