The FT-SE 100 index fell another 22.5 points to 3,014.8 after at one time giving the impression it was beginning to steady. But more acute depression in New York ensured any tentative enthusiasm was overwhelmed.
This month's pitiful retreat, which caught many experts on the hop, has now stretched to 236.5 points, a performance that throws into cruel perspective the so-called bull market run of 133.9 last month.
Another set of inflationary US figures did much of the damage. The American economy is clearly growing much more quickly than most observers expected and another interest rate increase looks inevitable.
London is now thinking in terms of a 7 per cent base rate by the year-end and Germany, despite moderately encouraging figures, still seems likely to join the higher interest rate bandwagon.
Such worries only tend to support the income-attractive electricities. Dividend growth, following the lenient restrictions proposed by the regulator, Professor Stephen Littlechild, is seen as 10 per cent a year until the end of the decade.
And the flotation of the National Grid will, the stockbroker Panmure Gordon suspects, be worth at least 150p, possibly 200p, per electricity share.
There is also the chance of takeover action. Defensive mergers in the industry are likely. Otherwise, the huge cash flows generated could tempt brash outsiders. Tomkins is regarded as the most obvious candidate to barge in with a generous offer.
Share buybacks have also contributed to the strength. Many electricity groups have taken advantage of the chance of buying in their shares and the laggards are expected to do so.
Eastern started the trend and others have since acquired shares through the market. South Wales, for example, picked up 250,000 at 817p, leaving the price 2p higher at 811p.
Northern, up 19p at 813p, stole the show. A day after announcing it intended to shed 800 jobs it started a buy-in for up to 10 per cent of its stock through Barclays de Zoete Wedd. In the event it gathered just under 10 per cent at prices between 812p and 818p.
The exercise, however, did not please everyone. Feelings were ruffled as some pension funds felt they had missed out. Selling through BZW, acting as Northern's agent, allowed some funds to save approaching 200p a share in tax.
It was suggested in some quarters that BZW had, not surprisingly, favoured its institutional clients. There was talk of those left out in the cold complaining to the Stock Exchange.
Inchcape, thought to be near to selling its Kennings car business, fell 7p to 400p. Grand Metropolitan shaded 2p to 399p as Societe Generale Strauss Turnbull downgraded by pounds 20m to pounds 940m for this year.
Great Universal Stores gained 12p to 537p after Hoare Govett dubbed the stock a 'trading buy'. Granada, making presentations, was firm at 484p and General Electric Co rose 1.5p to 282.5p in response to a Smith New Court push. Racal Electronic, an old bid favourite, rose 7p to 239p.
British Aerospace tumbled 26p to 445p following results but a former subsidiary, Aerostructures Hamble, suffered the sharpest reverse. A profit warning left the shares 50p lower at 73p. They were floated in June at 120p. The company was a management buyout in 1990.
Berkeley Business, the old Business Technology, was another bitter disappointment. Against hopes that the shares would return to market at 14p they failed to stir from their 8.5p suspension price. Seaq put volume at 4.1 million.
Attwoods, attempting to fend off an unwelcome bid from Browning-Ferris Industries, held at 117p. Another waste disposal group, Shanks & McEwan, fell 2.5p to 100.5p although FMR, the adventurous US investment group, appeared to scent it could be drawn into the bid battle, lifting its stake to 6.12 per cent.
British Petroleum lost 4p to 406p on stories of Russian resistance to the Azerbaijan oil development. Ramco Oil Services fell 18p to 226p.
Baldwin, the leisure group, firmed to 116p as David Kirch's Channel Hotels & Properties sold 6.56 per cent at 115p.
Middlesex Holdings held at 6p. It is forging a link with a New York-quoted financial group, Leucadia National, to supply metals to a smelting plant at Tadaz, Tajikistan. The Americans are expected to buy 29.4 million Middlesex shares at 7p. The Moscow Vozrozhdeniye Bank, which already has 27.6 million shares, wants to buy another 50.7 million at 5p.
Throgmorton has found a financing gap. Its Preferred Trust is issuing 2 million preferred shares to Bearing Power, the old Mining & Allied. The deal embraces warrants for shares at 25p against a 22.5p market price. Already it has achieved rewards from a similar deal with Hawtal Whiting, where preferred shares offer warrants to subscribe at 68p. The shares are 283p.Reuse content