Hopes of a deal generate new interest in Rolls-Royce

MARKET REPORT

Rolls-Royce, in the shape of aero engines and limousines, captured much of the stock market limelight.

In a dull, hesitant session Rolls, the maker of aero engines, pulled out of a long dive on hopes of a deal over its Parsons turbine generator operation, and Vickers, owners of the famous Rolls-Royce and Bentley cars, purred forward on talk it may sell its vehicle side.

The rest of the market seemed spooked by Alan Greenspan, the US banking chief. The man who sent shivers through the world's share markets last month is due to make an important speech to the Senate budget committee today.

The fear is that he will repeat his message that share markets are overheating. After all his earlier blast had only a short-term impact. After knee-jerk jitters shares recaptured their old buoyancy and the Dow Jones Average has risen more than 400 points since Mr Greenspan's cool-it-down advice.

After a bright start Footsie and the supporting FTSE 250 fell from their peaks; Footsie lost 13.7 points to 4,194 and the 250 3.2 to 4,580.2.

Rolls, stripped of the Rolls-Royce marques when its aero engine side sent it crashing to disaster in the 1960s, climbed 6.5p to 239.5p.

It was re-floated 10 years ago and is one of the more poorly performing privatisation shares.

In November the price hit a 267.5p peak, largely on a flow of overseas orders. It has since fallen as worries have grown about the impact the strong pound could be having on earnings.

Like British Aerospace it is pressing the Government to remove a ceiling on overseas shareholdings.

Currently foreign investors are restricted to 29.5 per cent of the capital. The overseas interest in both companies is now around 26 per cent.

Vickers, with a wide range of engineering activities, moved ahead 11p to 270.5p. The Challenger tank group is, some are convinced, contemplating selling its Rolls division either through a trade sale or flotation. It could feel the time is ripe for a Roller deal; sales of Rolls and Bentleys are the highest for six years.

BT was another in form. Thoughts that the giant deal with MCI, the US group, could, if it goes through, sharply increase institutional interest lifted the shares 5.5p to 423.5p, highest since 1994.

Four profit warnings took their inevitable toll. Thorn, the rental group demerged from the EMI showbiz operation in the summer, crashed 42.5p to 209p; Kingsbury, the furniture retailer, lost 94.5p to 205p after it said profits would not meet market expectations; and a gloomy message from Saltire, once Cannon Street Investments, lowered the price 14p to 77.5p.

But the market's rage was reserved for Victrex. The plastic group fell 92.5p to 173.5p following a warning that half-year profits will be down. A week ago the company offered a robust trading statement, containing not a hint of lower profits.

Burmah Castrol, the oil group, was hit by Cazenove caution, off 25p at 1,041.5p. Merrill Lynch put a 900p target on insurer General Accident, up 6p at 828.5p.

There was a smattering of gains among computer shares with CMG leading the pack, up 70p to 1,045p.

The hard-pressed spirits sector displayed modest strength.

Allied Domecq edged ahead 3.5p to 416p; Grand Metropolitan 6p to 438.5p and Guinness 6.5p to 438.5p.

British Building & Engineering moved ahead 5.5p to 55p, a 12-month high, as Britannia, off 3p at 32.5p, said its stake is 6.89 per cent.

It was the first time that Britannia, a builder, had disclosed an interest in the hard-pressed building materials group.

BB&E could well be receptive to a bid approach. It has talked about the possibility of a strategic merger. In recent years it has undergone substantial restructuring and said in October, when announcing a pounds 2.25m loss, it had moved into profits.

In a generally firm building sector AMEC was actively traded, gaining 7p to 98.5p. Tilbury Douglas was also in demand. A 520,000-trade at 560p inspired a 45p gain.

Hay & Robertson, the sports goods group, rose 9p to 138.5p on its merchandising link with Terry Venables

Tottenham Hotspur slipped 17.5p to 672p.5p following the latest defeat and "take profits" advice.

Ronson, developing as a luxury goods group, was hit by a run of sell orders with one for nearly 80,000 shares going through at 22.25p.

The quote was lowered 3p to 23p.

Taking Stock

A rash of buy circulars on Robert H Lowe are expected. The market appears to have got wind of at least three recommendations suggesting profits will hit pounds 2.9m this year (up from pounds 2.4m) with pounds 3.4m likely next year. The company produces replica football kits for a host of top teams and its shares, up 1.25p to 28.5p, are lowly rated compared with others, from football clubs to retailers, enjoying the sports boom. The group also has packaging and printing interests.

Eidos, the entertainment software group, has linked with MGM. It has obtained the European distribution for a series of computer games, including The Ultimate James Bond. Last month the group raised pounds 22m in the US by selling 3 million shares in ADR form. The shares are 870p, up 15p.

Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
Life and Style
fashion Designs are part of feminist art project by a British student
News
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
PROMOTED VIDEO
News
i100
Life and Style
food + drinkZebra meat is exotic and lean - but does it taste good?
Arts and Entertainment
Residents of Derby Road in Southampton oppose filming of Channel 4 documentary Immigration Street in their community
tv
Voices
voicesSiobhan Norton on why she eventually changed her mind
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
film
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
i100
Extras
indybest
Sport
Scottish singer Susan Boyle will perform at the Commonwealth Games opening ceremony in Glasgow
commonwealth games
Arts and Entertainment
Dwayne 'The Rock' Johnson stars in Hercules
filmReview: The Rock is a muscular Davy Crockett in this preposterous film, says Geoffrey Macnab
Life and Style
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

PMO Analyst - London - Banking - £350 - £400

£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Insight Analyst – Permanent – Up to £40k – North London

£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

Test Lead - London - Investment Banking

£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...

Day In a Page

Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
Honesty box hotels: You decide how much you pay

Honesty box hotels

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

Michael Jamieson: Why weight of pressure rests easy on his shoulders

The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn