Interest rate pressure powers Footsie to new peak

MARKET REPORT

After a four day pause blue chips recaptured their record breaking form. In often busy trading the FT-SE 100 index surged 34.9 points to 3,570.8 - a comfortable 13.1 ahead of the previous peak.

Once again it was the mounting pressure for lower interest rates which galvanised the stock market. A US cut is now expected later this month and with Kenneth Clarke winning the protracted debate with Eddie George a downward move on this side of the Atlantic will, it is widely thought, not be far behind.

Encouraging economic figures contributed to the air of optimism and a round of largely favourable company results -where Kingfisher and Prudential set the pace - provided an extra bonus.

With sterling strong, New York embracing new highs and Government stocks ahead there was, it appeared, a surfeit of goodies for the market to absorb.The euphoria was, however, again concentrated on the leaders. The supporting FT-SE 250 index, up 8.6, was shy of its year's high and 174.3 below the peak, achieved in February last year. However since last week's record the second liners have shown some signs of narrowing the gap with blue chips.

Spirit shares were among the day's best performers. The first, hesitant signs that the long decline in Scotch whisky demand was ending prompted their high spirits. Guinness, with interim figures due later this month, added 7p to 527p. Analyst Victor MacColl at stockbroker Raphael Zorn Hemsley is looking for pounds 346m against pounds 320m. Allied Domecq managed to shrug off its brewing blues with a 7p gain to 534p and Grand Met was 5p stronger at 425p. But spirit shares have a lot of leeway to make up. They have sadly underperformed the rest of the market as the recession has cut into profits. For example Guinness hit 629p in early 1992.

The Pru, up 20p at 356.5p, led the blue chip leader board, dragging other insurers higher. Kingfisher improved 19p to 483p as the market produced a huge sigh of relief that the figures, although awful, were above worst expectations.

Supermarkets, hit on Tuesday by talk of price wars, picked up again, with BZW rallying to support the sector. But there was, unusually on such an upbeat day, no shortage of casualties. P&O was in choppy waters, off 9p to 537p on worries today's half year figures will be accompanied by a rights issue. There was also apprehension about the impact of the cross channel price. BAA, the airports group, was unsettled by lower than expected August traffic figures with Eurostar competition evident. The shares fell 9p at 523p.

Cable and Wireless remained subdued on the departure of Duncan Lewis and Hanson's decline continued. Berisford dropped 20p to 164p as ABN Amro Hoare Govett cut profits estimates - from pounds 29m to pounds 25m and pounds 44m to pounds 35m. Trading at its Magnet kitchens operation prompted the revisions.

David S Smith, the packaging group, was back in the takeover frame, up 20p at 629p. Parkside International, another packaging group, jumped 25p to 76p as it revealed a bid approach. Last month the shares plummeted 38p on a profit warning. Fine Decor, the wallcovering group which has said it is in talks, put on a further 17p at 161p and Danka jumped 35p to 590p as it moved to take full control of Infotec, a Dutch group ranking as one of Europe's largest photocopier operations. Danka is one of the likely bidders for Eurocopy, up 1p to 99p.

Banks were firm with NatWest up 14p to 614p on stories it was near to selling its US operation, NatWest Bancorp. With the American banks caught in merger frenzy NatWest should have little trouble clinching a good deal.

Scottish Power, bidding for Manweb, rose a further 8p to 378p as Panmure Gordon continued a push based on expected earnings growth. Manweb added 10p to 1,018p. But just to underline that chasing takeover stocks often leads to burnt fingers, the shares of Canadian Pizza slumped 14p to 72p when bid talks were called off. And fading hopes of a bid from TI Group left Senior Engineering 3.5p weaker at 109p.

A profit warning lowered Excalibur, an engineer, 6p to 22.5pArtesian Estates gained 5p to 86p. It is near to making a significant acquisition. Not for the first time tiny Orb Estates was the most actively traded share with Seaq recording turnover at 61.21 million. But it did nothing for the price; stuck at 0.5p.

BI, the engineer which used to be called Bromsgrove Industries, firmed to 102p. James Capel placed 2.7 million shares with an institution at 101p.

Arts and Entertainment
The Doctor and the Dalek meet
tvReview: Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Arts and Entertainment
books
Sport
Diego Costa
footballEverton 3 Chelsea 6: Diego Costa double has manager purring
Life and Style
3D printed bump keys can access almost any lock
gadgets + techSoftware needs photo of lock and not much more
PROMOTED VIDEO
News
i100
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind the scenes to watch the latest series
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
News
i100Steve Carell selling chicken, Tina Fey selling saving accounts and Steve Colbert selling, um...
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
News
i100
News
The slice of Prince Charles and Princess Diana's wedding cake and the original box from 29 July 1981
newsPiece of Charles and Diana's wedding cake sold at auction in US
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
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

Law Costs

Highly Attractive Salary: Austen Lloyd: BRISTOL - This is a very unusual law c...

Network Engineer (CCNP, CCNA, Linux, OSPF, BGP, Multicast, WAN)

£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...

DevOps Engineer (Systems Administration, Linux, Shell, Bash)

£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...

Data Scientist (SQL, PHP, RSPSS, CPLEX, SARS, AI) - London

£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...

Day In a Page

Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference