Last-minute leap brings the year to a record end

MARKET REPORT
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The Independent Online
After much huffing and puffing shares produced a springheeled leap to finish a record breaking year at a new peak.

It was all a question of will - or, to be more precise, old fashioned manipulation - which allowed the stock market to celebrate what has been a remarkable 12 months in such style.

Trading, in the half-day session, was pleasantly gentle with a steady trickle of buying orders helping to create a mood of jollity.

Book squaring by market makers and year-end portfolio window dressing by some institutions was again evident. Anticipated New Year share tips were often given a hopeful whirl; so were the perceived takeover and recovery candidates.

The most widely held view is the market will continue to power ahead - at least in the first half of next year. Takeover action is expected to continue at a heady pace although it is unlikely to reach the record pounds 70bn level achieved this year.

But the looming general election is expected to steadily erode sentiment as the second half of the year unfolds.

One of the influences the market hates is uncertainty. And an approaching election will provide plenty of such a commodity.

Labour has, of course, spent much time and energy in an endeavour to calm traditional City fears about its policy. The signs are that it has failed and a pending change of government will produce the familiar unfavourable market reaction.

The FT-SE 100 index closed 12.6 points higher at 3,689.3, topping the previous record, hit at the start of the month, by 8.9. It also managed a new trading high - 3,690.6. Footsie started the year at 3,065.5.

The supporting index, covering the 250 stocks immediately outside Footsie, finished at 4,021.3, a year's high but below the peak achieved in February last year.

Vodafone, partly on US bid hopes, was the best performing Footsie constituent, gaining 9p to 230.5p. Royal Bank of Scotland, which is attracting much of the hot takeover money, rose 6p to 586p, a two day 14p gain. It is, however, below the 608p high reached a month ago when takeover talk attained frenzied levels.

Trafalgar House had a quieter session than on Thursday; the shares edging ahead 0.75p to 27.75p. The feeling that 26 per cent shareholder Hong Kong Land, part of the Jardine Mattheson empire, is looking at ways to demonstrate its support is behind the strength of the shares.

It is rumoured to have instructed its stockbrokers to lift its stake to 29.9 per cent, the maximum before triggering an obligation to mount a bid for full control. Some, however, think HKL will not bother with such a preliminary exercise but launched a bid at around 35p a share,

Building and related shares moved ahead. Optimism that the housing market should soon emerge from its long depression helped sentiment. But the market has heard it all before. And the gains were muted and selective. Abbey National and Berisford, the Magnet kitchens group, led the field.

Whitbread was encouraged 11.5p higher at 680.5p on further consideration of the likely benefits from its proposed budget hotel and restaurant deal with Forte, firm at 330.5p following an upward revision of its profit forecast to pounds 190m.

British Gas, little changed at 154p, was comfortably the day's most actively traded share with Seaq putting volume at nearly 77 million; Tesco attracted a 40.2 million turnover and Prudential Corporation nearly 26 million. The late printing of delayed trades produced the flurry. There were signs of a big programme trade and suggestions some of the business could represent the second part of bed and breakfast deals.

The heavy trading, which also featured Redland, BTR, Great Universal Stores and Unilever, represented half the day's volume. ballooning the turnover figure to an unrepresentative 418.8 million.

British Aerospace rose 7p to 797p on a Philippines Airbus contract and in a firm drugs sector Glaxo Wellcome gained 10p to 915p on hopes for its influenza treatment and Zeneca 11p to 1,246p as attention was directed at some of the drugs in its research pipeline.

Amstrad managed to recover a little of Thursday's loss, rising 4.5p to 196p. Lloyds TSB gave way to profit taking, off 12p at 331.5p as some snatched their merger rewards.

Stordata Solutions, a computer data group which emerged out of the old Millgate security business, rose 2p to 26p, a new high, on hopes it will soon indulge in rapid expansion.

DATA BANK

FT-SE 100 3,689.3 + 12.6

FT-SE 250 4,021.3 + 13.8

FT-SE 350 1,830.6 + 6.2

SEAQ VOLUME 418.8m shares, 11,494 bargains

Gilts Index 95.94 -0.02

TAKING STOCK

r Alliance Resources, in bitter dispute with its ousted chief executive John O'Brien, seems to be on the recovery road. A cash call is planned and the company has its sights on the former Soviet Union.

There is also talk it is near to clinching a deal, possibly a reverse takeover, that could substantially improve its prospects. The shares edged ahead 0.5p to 3.75p. They hit 12p before sinking to a low of 1p on the O'Brien debacle.

r London & Associated Properties, at 28.5p, is bumping along near its year's low and well adrift of its estimated 52p asset value.

It has lifted its shops portfolio to more than 600 by buying the Kings Square, West Bromwich, shopping centre. This year's profits are expected to be little changed at pounds 1.7m.

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