Market report: Financials keep Footsie moving

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FINANCIALS PULLED Footsie higher although growing fears about the impact of the Asian crisis weighed heavily on some blue chips.

Footsie finished 54 points stronger at 5,858.9 and even the mid and small cap indices managed to make headway.

An overnight rally in Hong Kong predictably lifted the HSBC banking group 87p to 1,548p, and other financials attracted attention on the theory they that had been sold too aggressively in recent times. Close Brothers, the banker, gained 59.5p to 833.5p.

With the financial quarter ending next week most fund managers are content to busy themselves preparing their quarterly reports and with the exception of tried and tested shares they are keen to keep their powder dry until the next quarter is under way.

Second and third-line shares at last perked up. After an 11-day losing streak the mid cap index managed to achieve a 21.3 recovery to 5,527.7 and the small cap index improved 6 to 2,617.5. It was the longest mid cap decline for four years.

Asda, on its results, put on 10.5p to 205p and Carlton Communications rose 26p to 558p on Henderson Crosthwaite support.

Rolls-Royce, down 10.5p to 236p, was one of the Asian casualties, ignoring hopes that President Clinton's visit to China will bring some stability to the Far East. Its shares have been in a steep dive since hitting a 304.5p peak last month as the stock market fretted about Far Eastern orders being delayed or even cancelled.

The Asian interests of Diageo and Allied Domecq were largely responsible for the downcast appearance of the two spirit groups. Allied fell 16p to 564p (against 634p in April) and Diageo lost 13p to 695p (764p last month).

Allied's weakness has been exacerbated by its failure, at least so far, to respond to the creation of Diageo by forging links with other spirit groups.

Next, booted out of Footsie on Monday, firmed 3p to 521.5p. It is closing its seven overseas stores, five in the US, which incurred losses of pounds 3.4m last year.

The retailer's fall from grace - its shares were 835p earlier this year - has not deterred Tiger Management, the US hedge fund where Baroness Thatcher is an adviser, from increasing its shareholding. It has acquired a further 2.76 million shares, lifting its stake to 5.4 per cent. It is Next's largest single shareholder. Tiger likes what it regards as recovery situations and expects to double its money within three years.

For a time Scottish & Newcastle, the brewing group, led the Footsie leader board. But its premier position was a fluke. A spaghetti-fingered dealer punched in an incorrect deal for 1,687 shares at 903p against the then prevailing price of 843p. The brewer ended in line with trading, up 20.5p to 848.5p.

Imperial Chemical Industries continued to suffer from its analysts' briefing, falling 5p to 995p. Sutherlands cut its profits projection from pounds 530m to pounds 400m and Dresdner Kleinwort Benson said sell.

Airtours, the holidays group, climbed 9p to 442.5p on ABN Amro support and BOC, the chemical group, managed a 3p gain to 819p despite caution from SBC Warburg and Merrill Lynch.

Booker, the food distributor, firmed 1p to 228.5p as analyst briefings got under way and Hillsdown shaded 2.5p to 166p ahead of meetings next week. BT Alex.Brown lifted Express Dairies 8.5p to 160p.

Psion was the day's star performer. The hand-held computer maker jumped 179p to 602.5p. Since details of its superphone deal started to emerge on Wednesday the shares have more than doubled.

Although the computer and telecom charge lost much of its impetus there was some heady progress. Cable & Wireless Communications moved ahead 27.5p to 606.5p and Securicor, still hugging its 40 per cent interest in the Cellnet mobile phone group, improved 12p to 517p with Morgan Stanley suggesting a 600p target. Logica lost 112.5p to 1,950p, seemingly on sell advice from CSFB.

Colt Telecom put on 77.5p to 2,360p and crisis-ridden Ionica continued to draw some benefit from the excitement, gaining a further 4.5p to 36p. BT fell 9p to 749p.

Stagecoach's three-day losing Footsie run ended with a 35p advance to 1,320p.

The Government's power play was given a mixed reception by the generators. National Power ended 14p brighter at 581p but PowerGen, at one time up 24p on talk of a merger with America's Houston Industries, settled for a 4p gain at 830p.

Northern Leisure, the discotheque chain, was at one time off 27.5p. It admitted the World Cup had hit trading but said first quarter sales were pounds 14.79m against pounds 8.51m. The shares ended 1p lower at 185.5p.

The day's biggest faller was KBC Advanced Technologies, an oil consultancy. The shares crashed 195p to 205p after it reported deferrals and spending cuts in the US oil industry had hit profits. Acatos & Hutcheson, the edible oil group, slipped 27p to 210p as profits were overtaken by losses.

HW, a recruitment group, made a weak debut. Placed at 160p the shares sunk to 130p, closing at 135p. AdVal, a training consultancy, ended at 67.5p against a 65p placing.

London Clubs International spun 11p higher to 156p following an analysts' visit to its new London casino.

Mice, the exhibitions group, edged ahead 2.25p to 21.75p on industry talk that a significant earnings-enhancing deal was near completion.

Chesterton, the estate agent, suffered a 4p fall to 19p as a large line of stock hovered.