Indications that a US investment house, thought to be Lehman Brothers, had downgraded its profit expectations eroded sentiment already damaged by Goldman Sachs' sharp reduction of its forecast for Glaxo Holdings on Tuesday.
Wellcome dropped 23p to 686p and Glaxo fell 8.5p to 579p, a two- day fall of 19p. Boots, bugged by stories of new problems over its Manoplax heart drug, was at one time 9p down but closed just 2p off at 437p. SmithKline Beecham fell 12p to 434p.
The drug industry has been plagued by worries of increased competition. Profit margins have come under intense pressure. Many governments are looking at the allegedly highly lucrative profit margins associated with many products. And the Clinton administration has, in effect, left the industry in limbo by delaying yet again, until next year, its widely signalled reforms for the US healthcare industry.
Medeva had a particularly uncertain time, ending down 10p at 213p. Selling from the US was the reason put forward.
Fisons, although said to be hit hard by the Lehman revisions, displayed its own style of independence as takeover rumours continued to flourish. Astra of Sweden and Ciba- Geigy of Switzerland and the now stand-alone Zeneca, unchanged at 626p, remain the favourites to pounce. Fisons rose 5p to 182p.
The rest of the market again found a heady early pace too hot to handle. At one time up 9.4 points the FT-SE 100 index ended 6.9 down at 2,900.7. Special situation stocks caught the eye as a sudden display of corporate activity created interest.
The West Country pubs group JA Devenish led the field with an 85p surge to 367p following the surprise bid from Greenalls Group, down 28p at 358p. Boddington Group, sitting on 19.2 per cent of Devenish following an abortive takeover assault, rose 13p to 286p. It intends to accept. Whitbread Investment Co, with 11 per cent, rose 20p to 596p.
The exotic price offered for Devenish prompted a revision of pub values. Henderson Crosthwaite calculated that Grand Metropolitan's Chef & Brewer estate could, on the Greenalls valuations, be worth pounds 1.3bn. Grand Met rose 7p to 432p. Whitbread 'A' edged ahead 3p to 500p on the Credit Lyonnais Laing buy recommendation.
Charter Consolidated's decision to buy the Minorco stake left the shares 14p higher at 648p. Hopes Minorco will bid, or at least buy, in the UK building materials industry lifted Tarmac 6p to 135p and English China Clays 11p to 456p.
Rothmans International, however, attracted a Stock Exchange suspension, at 720p, and was unable to contribute to the day's activity. Dunhill Holdings was also put on hold at 405p. With the outline of the reorganisation known, and allowed to form the basis for trading on Tuesday, the Exchange's action was late and unnecessary.
Electricities dimmed following the Norweb (down 17p at 480p) results. But water stocks continued to recover from recent lows.
Lucas Industries, meeting analysts today, edged ahead 1.5p to 136.5p; Reuters retained its appeal, rising a further 19p to 1,402p.
The builder George Wimpey improved 5p to 169p. Goldman Sachs lifted its forecasts on the strength of improved housing starts and wider margins. It increased this year's forecast by pounds 2m to pounds 37m and next's from pounds 67m to pounds 75m.
Allied-Lyons, a shade easier at 540p, was ruffled by a hovering 3 million line of stock. General Electric Co, also facing a 3 million overhang, lost 3.5p to 337.5p.
United Biscuits was at one time 10.5p lower but ended 6.5p down at 396p. Barclays de Zoete Wedd switched from hold to sell. It frets that profits could be disappointing, dragged down by the US operation.
Great Universal Stores non- voting 'A' shares rose 28p to 1,745p on votes-for-all hopes. Courts, the furniture group, jumped 91p to 613p on its results. Debutant Carpetright reached 165.5p from a 148p placing price. Societe Generale Strauss Turnbull regards the shares as a buy, forecasting profits of pounds 11.8m this year and pounds 15.9m next
Kingfisher put on 13p to 613p as Hoare Govett said buy on improved prospects for its French operations.
Pittencrieff was little changed as US trading started in the shares of its American offshoot.
Aminex held at 27.5p. It confirmed it was contemplating oil and gas activities in the former Soviet Union and Richmond Oil & Gas, already entrenched in Russia, gained 1.75p to 6.5p.
Smith New Court, reporting year's figures today, rose 2p to 250p, highest since the crash of 1987. The market is looking for profits of pounds 18m against the pounds 18.4m peak achieved last year. The strength of the shares has encouraged talk that the figures will be accompanied by a cash call. SNC last tapped shareholders, which include Rothschild with 29.37 per cent, eight years ago.
Expect developments at Pan Andean, an Irish company traded on the 535 matched bargains market, seeking gold and oil riches in Bolivia. The shares are attracting increasing attention. They have climbed this year from about 4p to 13.5p. Some chunky share deals have been completed. Pan Andean remains tight-lipped but some observers believe a statement will be made soon.
Expect a big deal this morning from TI Group, which is believed to be forming a joint venture between its Dowty subsidiary and the leading French aircraft undercarriage manufacturer, Bugatti. The venture will put TI into the top three world undercarriage suppliers. TI's share price has suffered after last year's acquisition of Dowty but could be boosted by this clarification of its strategy.Reuse content