Market Report: American support boosts Footsie

FOOTSIE ENJOYED its first three-figure gain for more than four months as world stock markets responded to America's helping hand for the beleaguered Japanese yen.

With Hong Kong staging a recovery and New York in ebullient form, blue chips were back in buoyant mood with double-digit gains. But Footsie's 103 points uplift to 5,832.7 contrasted sharply with the performance of the mid cap index, down 19.6 at 5,683.9. The second liners, which had been in rampant form, have slithered in the last six sessions with their index falling 282.5. Government stocks were also weak, falling by up to a pound.

The US intervention, seen as what could be a decisive move in tackling the Asian slump, predictably lifted shares with strong Far Eastern connections with HSBC scoring a 104p gain to 1,540p.

Still, trading was not heavy and many market men, although relieved at the sudden change of sentiment, were suspicion of the upsurge, suggesting it lacked conviction.

Billiton led the Footsie charge. Its progress owed little to the new hope for improvements in the Far East. A planned share buy-back was responsible for a 10.75p gain to 137.25p.

Less than a year after extracting cash from optimistic investors via a London flotation the South African mining group has decided to buy back up to 10 per cent of its capital.

The group is exploiting its poor share performance. The shares arrived last summer at around 222p; subsequently reaching 249p. They were hit by poor metal prices and were resting near their low ahead of the buy- back announcement.

Dresdner Kleinwort Benson will, no doubt, be pleased by the Billiton initiative. It is thought to have a large parcel of the stock stuck on its book, acquired as part of a bought deal at around 150p a share.

Other blue chips to race higher included Nycomed Amersham, the health care group. SG Securities said buy following the Swedish investment presentation. Spirits giant Diageo strengthened 47.5p to 737p on rumoured Morgan Stanley interest and Marks & Spencer shrugged off suggestions of poor sales with a 27p plus to 560p.

The Glaxo Wellcome bid for SmithKline Beecham story continued to circulate with Glaxo up 68p to 1,775p and SB 11.5p to 735.5p.

It was not, of course, all one-way traffic. British Energy took a pasting, falling 42p to 558p; Deutsche Morgan Grenfell was thought to have reduced its stance to underweight. BTR, thought to be on the City investment round, fell 3p to 174p with DKB making negative noises.

Reuters added 17p to 708p ahead of a technology seminar on Monday.

British Petroleum, planning to boost its Alaskan output by more than 20 per cent over the next few years, gained 12p to 875p. It explained its intentions to analysts, looking over its Alaskan operations.

BT rose another 26.5p to 698.5p. BT Alex.Brown has an 800p target and believes the shares could, in certain favourable circumstances, top 950p.

Vaux, the Sunderland group where takeover talks ended on Friday, rose 10p to 325p. Reports Enterprise Inns would be prepared to buy the brewers' pub estate seemed to prompt the gain.

Thorn, the rental chain, had an eventful session.The shares ended at 220p, up 10.5p, after touching 237.5p in hectic dealing. The boys in dark glasses got hold of a story that the mooted takeover bid was on its way and piled in. But the bid, rumoured to be from the Barclay brothers, failed to materialise; instead Thorn started its overseas withdrawal by selling its US operations to Renters Choice for pounds 545m.

ISA International, a distributor of information processing equipment, produced the session's profit warning and promptly collapsed a further 21.5p to 41p.

The mysterious goings on at Huntingdon Life Sciences on Tuesday were solved when it became apparent Robert Fleming had sold most, if not all, of its 14.46 per cent shareholding. Most of it seems to have ended up with the market-making arm of Merrill Lynch.

The stock was dumped with Huntingdon becoming aware of Fleming's departure around mid-morning. The testing agency, which was hit by allegations of cruelty to animals in its laboratories last year, is a target of animal rights activists who have threatened to embarrass fund managers supporting the company. The shares, down a further 1p to a 17.5p low, crashed 15p on Tuesday.

Oliver, the shoe shop chain, fell 1p to 28.5p as chairman Denis Cassidy made another attempt to raise pounds 5.7m. Norbain, the closed circuit TV group, put on 6.5p to 281.5p; Butterfield, the stockbroker, said the recent weakness offered a good buying opportunity. Analyst Luke Ahern sees profits pounds 4.75m last year and pounds 5.75m this year.

Despite the signs that car groups are under pressure, with two profit warnings in the past few days, HR Owen, the upmarket car dealer, edged ahead 0.75p to 17.75p. There is talk of a possible bid - with Pendragon the name on the forecourt - or an attempt to take the group private. Chief executive Nicholas Lancaster last week lifted his interest to 21.7 per cent.

FIRST CHOICE, Britain's third largest holidays group which embraces the Air 2,000 airline, is rumoured to be planning to swoop on EasyJet, the cut price airline planning a stock market flotation. EasyJet, started in 1995, is owned by the Haji-Ioannou family. It has seven aircraft. Price of the deal is said to be around pounds 110m.

DEAN CORPORATION, the builder and property services group, has taken over a property maintenance company, Castellain, for up to pounds 250,000. The shares softened to 15.5p.

COMINO, THE software group, weakened 10p to 267.5p, although stockbroker Williams de Broe is bullish. Analyst Peter Whiting looks for profits of pounds 2.6m this year and pounds 3.2m next. Recent strength of the shares has given the group the scope to make more acquisitions.

SEAQ VOLUME: 943 million

SEAQ TRADES: 67,683

GILT INDEX: 104.9 -1.05

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