LucasVarity leads charge as Footsie smashes 4,700

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The Independent Online
LucasVarity, the Anglo-American components group which has had a difficult run since peaking at 259p late last year, led the blue-chip charge with a 14.5p advance to 209p. Last week the price was 182p.

It is unusual for an engineer to head the pack. In recent months a financial group has normally enjoyed the distinction.

Although many financials were again in the money, some of the more neglected Footsie constituents for once made strong progress.

LucasVarity's display was ahead of an analysts' presentation today. Up to 40 analysts, some from the US, are set to meet company executives at the group's Perkins diesel factory at Peterborough.

The suspicion is LucasVarity, with first-quarter results due, will have a good tale to tell and the market is intrigued by the expected US contingent.

The Anglo-US group was created last year in a pounds 3.2bn merger which embraced Lucas Industries and the Varity Corporation; American Victor Rice became chief executive.

The enlarged group has had difficulty reconciling the demands of US and UK investors. Its decision to cut yearly dividends to help pay for share buybacks has run into criticism on both sides of the Atlantic.

Footsie closed for the first time above 4,700 - up 52.9 points at 4,739.6. New York, hitting new peaks in London trading, Continental, particularly German, buying and a strong futures market fuelled the advance.

But again it was very much a market of haves and have-nots. Blue chips hit the high road but the rest limped, often miserably, behind. The FTSE 250 index, up 13.2, is more than 200 below its peak and the FTSE Smallcap index managed to close lower, albeit by a mere 0.1.

Footsie could enjoy another romp today following the after-hours disclosure that Energy Group, the former Hanson company, could collect a bid of more than 700p from the US Pacific-Corp. Energy shares closed at 580p, up 18.5p.

There was talk some fund managers, growing increasingly disenchanted with non-Footsie shares, were selling them to buy blue chips.

The temptation to stick to market leaders was also evident in New York. Although the Dow Jones Average was in record territory when London closed Nasdaq was a shade lower.

General Electric Co, on the possibility of a British Aerospace deal, rose 17p to 353.5p; a Lehman Brothers suggestion the shares should go to 400p was another bullish influence.

BT, with Merrill Lynch hanging a 500p target, gained 12p to 482.5p and Smith Industries put on 7p to 784.5p ahead of an analyst meeting. BG flared another 9p to 218.5p on continuing Dresdner Kleinwort Benson support.

For BTR it was another day in the dumps - down 2p to 184.5p. At one time the price hit 180.5p.

Enterprise Oil, off 9.5p to 688.5p, and Lasmo, 3p at 272.5p, were hit by Merrill and Credit Lyonnais Laing adopting a more cautious stance on the oil sector.

Glaxo Wellcome jumped 39.5p to 1,273p and Amersham International's deal with Pharmacia & Upjohn lifted the shares 131.5p to 1,482.5p.

Builders scored more gains on the widening impact of the housing recovery. Barratt Developments rose 6p to 245.5p.

Financials moved ahead although their exuberance fell below earlier efforts. Abbey National rose 12p to 895.5p, Halifax 13p to 762p and Standard Chartered 13.5p to 972.5p. National Westminster Bank slipped 12p to 804p.

Jarvis, duly confirming a substantial deal was being negotiated, gained 5p to 296.5p.

Morrison Construction was little changed at 290p as 14 per cent of the capital was placed at 275p by directors; N Brown shaded to 413.5p as the Alliance family sold 12.7 million shares at 400p.

Scottish Media put on 7.5p to 706p on the expected bid for Grampian TV, up 7p at 317.5p. Scottish Media now has 19.9 per cent of its target.

Granada added 12.5p to 902.5p on its talks with Yorkshire-Tyne Tees TV, off 5p at 1,155p.

The long-awaited bid for clothing group SR Gent finally appeared, lifting the shares 8p to 79.5p.

Mice, the exhibition display group, held at 8.5p as stockbroker Ellis & Partners placed 8.5 million shares at 8p.

Petra Diamonds added another 13p to 91.5p and Soco International gained 20.5p to 256p on its fourth Mongolian oil discovery.

High Point, a property consultant, surged 30p to 57.5p; a restructuring, including a pounds 7.7m cash call, is under way.

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