The shares were puffed up 25p to 445p, only 15p below their all-time high. Then in volatile late trading, enthusiasm was almost stubbed out before the shares recovered some of their firmness and ended 17.5p higher at 437.5p. The 46 cases were also dismissed against the other leading British cigarette group, Imperial Tobacco, which suffered something of a rebuff, edging ahead only 4p to 731p.
The High Court decision did not come as a surprise and the shares of the two cigarette producers have enjoyed increasing stock market support. Blue-blooded stockbroker Cazenove yesterday joined the buy chorus.
It is widely believed that the High Court decision will discourage much further action against the two groups and will strengthen the investment appeal of Gallaher and Imps.
British American Tobacco, operating overseas and not a direct beneficiary of the judgment, firmed 6.5p to 569.5p.
Gallaher is one of 12 Footsie companies on next week's reporting schedule. BT Alex.Brown is looking for a 2 per cent gain to pounds 320m.
During a another busy session, leading equities on several occasions tried to rally. For a time Footsie moved hesitantly into positive territory but the index ended 31.4 points lower at 6,175.1.
Supporting shares, however, were again more confident. The mid cap index rose 22.2 to 5,248.3 and the small cap 6 to 2,277.3.
An indecisive New York display was the major influence. All the other factors that pushed Footsie to a peak during the week, such as Tony Blair's euro signal and the flow of steady company profits, were quietly forgotten.
Railtrack, where the chairman Sir Robert Horton is retiring, was back on the express line, advancing 77p to 1,552p in further response to the rail summit and the company's confident projections.
Alliance & Leicester, the former building society, was the major Footsie casualty, off 50.5p to 840.5p following uninspiring results.
British Aerospace lost 23.5p to 396.5 as worries about its Saudi Arabia contracts refused to fade, and Glaxo Wellcome gave up 75p to 1,991p on its US flu drug rejection.
Retailers continued to edge higher as investors took the view that the sector's recession was coming to an end.
Marks & Spencer firmed a further 4.75p to 419.75p following its management shake-up, although BT Alex.Brown wondered whether the group "fully understood its problems".
Arcadia, half of the Burton split, rose 31p to 208.5p as a large stock overhang was apparently cleared. An agency cross of 2.3 million shares at 187p, then a premium to the market price, inspired the surge.
The shares, however, remain in the bargain basement; they topped 500p a year ago.
Storehouse, where vague takeover gossip has been heard, added 15p to 153p and the department store Selfridges, the subject of a British Land build-up, improved 15p to 239p. Among the depressed retail tiddlers, Era gained 0.5p to 6.75p. The toy shop chain has doubled since July. This week it produced an encouraging profit forecast.
Cadbury Schweppes slipped 15.5p to 957p. According to US reports, it is trying to spend some of its potential cash pile on buying a Hawaiian Punch drinks business from Procter & Gamble, the sprawling detergent and foods group. The deal would cost around pounds 95m.
Although it has no significant confectionery interest in the US - Hershey makes and sells its products under licence - Cadbury is America's third- largest soft drinks maker.
Enterprise Oil, talking merger with Lasmo, rose 16.5p to 269.5p. US buying was said to be responsible.
Some of the high-flying computer shares took a tumble. Guardian IT accompanied higher profits with share sales by one of its venture capitalist backers and by directors and management. The price fell 30p to 617.5p. ITnet lost 53.5p to 425.5p although profits rose 44 per cent.
Waste Recycling, suspended at 456p for the takeover of 3C, returned to market, ending at 500.5p. The group, headed by David Williams, has grown rapidly; it was worth pounds 8.3m five years ago and after the latest deal is capitalised at more than pounds 500m.
Atlantic Telecom's expansion into Northern England from its Scottish base added a further 30p to 202.5p, but Filtronic, a maker of telecom bits and pieces, fell 26p to 797.5p as investors moved to take profits in some of the telecom shares.
Airtech, a mobile communications group, improved 4.5p to 38.5p after agreeing a share exchange offer, said to be worth 41.9p a share, from Remec, a US group.
Rumours of corporate action boosted Zetters, the bingo and pools group which has made no secret that it is examining its future. The shares rose 13p to 126.5p. The company has indicated it may be split into two, with separate deals concluded for its bingo and pools businesses. There is also the possibility of new management being injected and presumably a reverse takeover.
Swan Hill, a construction group where bid talks are going on, put on 6p to 66p, and Hampden, an Irish do-it-yourself chain where J Sainsbury sits on 29.2 per cent, improved 5.5p to 45.5p.
Calluna, the electronics group which has banked on its Hardwall computer security system, continued to retreat after the surprise profits warning. The shares fell a further 1.5p to 15.5p. They started Tuesday at 27p.
SEAQ VOLUME: 1 billion
SEAQ TRADES: 84,986
GILTS INDEX: n/a
SIGNET HELD at 40.75p as BT Alex.Brown lifted its profits forecast by 6 per cent to pounds 87m and the analyst John Richards suggested the shares should hit 60p. In its revamped form, the former Ratners gets nearly 75 per cent of its profits from the US and is probably the most successful British retailer in America. Four years ago the shares slumped to 12p; last year they touched 51p.
DEALINGS ARE due to resume on Monday in shares of Scotswood Industries, a sedate engineering group which has transformed itself through a reverse takeover. It acquired Midas, which has a transport data communication system, and sold its existing engineering businesses to their management. The Midas deal was clinched with the shares priced at 10p.Reuse content