Market Report: Blue chips ride the Buffett factor

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The Independent Online
THE STOCK market has lit upon a new guessing game - spotting investment guru Warren Buffett's latest British investment.

He has let it be known that he is stalking a British company and his stake will soon move through the declarable 3 per cent barrier. Until he has to make an announcement, the sage of Omaha is naturally playing his cards close to his chest, shrouding the identify of his target in mystery.

But the Buffett reticence was an irresistible temptation for many traders to try to anticipate the legendary American investor's intentions.

Great Universal Stores, up 35.5p to 780.5p, and Royal Bank of Scotland, up 62p at 1,425p, were probably the two favourite candidates. But Reuters, 36.5p higher at 1,009.5p, Marks & Spencer, 14.25p to 429.5p, and fund manager Amvescap, 38p to 670.5p, were others in the frame. Spirits behemoth Diageo could be another target as Mr Buffett at one time built a stake in one of its constituents, Guinness. But Diageo fell 8p to 676.5p.

The Buffett influence, takeover excitement and a firm New York opening helped Footsie to post yet another record high, up 71.9 points at 6,513.1 in busy trading. Supporting shares also made headway.

Tesco, following results, led the Footsie leader board with a 9.75p gain to 169.25p. Among those in the takeover ferment were Bass, the brewer and hotelier. It frothed 33p to 877.5p on the unlikely yarn that Granada was preparing a strike. The market is convinced that the leisure group, up 50p at 1,143p, has expansion in mind and is casting around for a bid candidate. A while ago Whitbread, up 30.5p at 978.5p, was rumoured to be in Granada's sights.

Unilever rose 24.5p to 595p on rumours that it plans a US acquisition. Barclays, on the brief reign of chief executive Michael O'Neill, was at one time down 49p. But the realisation that the bank has merely increased its vulnerability to a takeover strike lifted the shares 46p to 1,119p. Lloyds TSB added 39.5p to 1,060p on speculation that it may abandon its rumoured US ambitions and turn its attention to Barclays. Royal Bank of Scotland was seen as another contender for the accident-prone bank.

Scottish & Newcastle jumped 27p to 674p on its positive analysts' meetings, but stockbroker Sutherlands was unimpressed, holding its year's profit forecast at a bottom-of-the-range pounds 392m following talks with the company.

AstraZeneca missed the fun, achieving its sixth fall in a row. The shares lost 33p to 2,732p; they have yet to hit winning ways since the Anglo- Swedish merger was completed. Railtrack reversed 24p to 1,355p following negative regulatory comments, and Dixons suffered a predictable reaction to its heady surge, falling 22p to 1,542p.

Scapa's pounds 329m sale of its paper business to the German Voith group lifted the shares 27p to 144p and inspired other packaging and paper shares, with David S Smith rising 10p to 123p.

St James Place put on 21.5p to 280p on thoughts that Prudential's swoop on the M&G unit trust group could put the life insurer into play, and Safeway rose 6.25p to 251.5p on talk of an overseas strike.

Laporte, the chemicals group, dropped 95p to 667.5p as its takeover talks were abandoned after just a day. The group is now seen as in play.

Next, the fashion chain, firmed 8p to 830p as hedge fund Tiger Management sold more shares. Portsmouth & Sunderland Newspapers rose 50p to 1,750p as Johnston Press lifted its stake to 17.35 per cent.

The "A" shares of Sotheby's, the auctioneer, surged a further 312.5p to 2,312.5p following a US report about the scope for auctions on the Internet. Sotheby's plans a website in the summer.

Pilat Technologies, on its broadcast systems sale, rose a further 12p to 47.5p. Petra Diamonds sparkled 16.5p higher to 81p following investment meetings, and Cambridge Mineral Resources firmed 1.25p to 8p on growing hopes for its Irish diamond prospect.

SEAQ VOLUME: 1.1 billion


GILTS INDEX: 114.19 -0.25

LONDON PACIFIC, an obscure financial group, soared 174p to 393.5p; another beneficiary of unfettered Internet fever.

The Jersey-based company is said to have stakes in 15 unquoted, US Internet operations. Many are still in the fledgling stage but, the story runs, if they all managed to come to market the London Pacific shareholdings could be worth over pounds 1bn. The company's ADRs have been strong in New York.

WEIR IS moving ahead again; the shares rose a further 10p to 272.5p.

American predators have circled and in February the engineer turned down a 300p a share offer from Flowserve of Texas. The latest story is of the hunted turning hunter. It is said to be deeply involved in talks to buy some major parts of a leading Swiss group. Weir shares touched 307p on the appearance of Flowserve.