Market Report: Fragile Footsie rally fails to convince

THE CRASH so confidently predicted in some quarters failed to materialise as Footsie, after a nervous session, managed to recapture some of Friday's lost ground.

But it was not a convincing performance. Order-driven trading, by its very nature, increases volatility and the index swung between extremes of a 76.7-point gain and a 32.5 loss, which tended to underline the fragility of the stock market.

Trading was again moderate. Traders spent much of the session complaining about the lack of business with, it seemed, many investors sitting on the sidelines.

Sentiment was helped by renewed takeover speculation. The sharp fall since shares peaked in July has left many groups looking decidedly vulnerable. Banking and drugs are the two sectors where corporate activity is expected.

Investment house CSFB was said to be telling clients that the fall had been too steep and drugs and life insurers looked attractive. The private client broker, Redmayne Bentley, told clients it did not expect a bear market "though we could still drift some way in the coming weeks".

Strategist Allan Collins said: "When stocks drop sharply on short-term trading and `bad headlines', investors should buy - getting into the market on a big correction should prove to be a good move in the longer term."

New York provided the prop for blue chips, with the turmoil in Russia and worries about the Far East and Latin America pushed into the background.

HSBC, the banking group, was one of the best-performing Footsie constituents as the Chinese authorities again came to the rescue of the beleaguered Hong Kong market. Aggressive buying produced another seemingly confident session, with the Hang Seng index rising 4.2 per cent.

The sterling-denominated HSBC shares responded with an 83p gain to 1,374p and Standard Chartered firmed 26p to 595p.

Although Footsie rallied, up 76.7 points at 5,553.7, the rest of the market remained in the doldrums. The mid cap index tumbled a further 18.5 to 5,056 and the small cap lost 9.3 to 2,289.3.

Retailers had another raw session with MFI, the furniture group which has been in seeming relentless decline this year, hitting another low. The shares, in brisk trading, lost 3p to 43p on worries that next month's shareholders' meeting will be particularly gloomy, possibly encompassing a profits warning. A few weeks after the meeting MFI is due to start a round of City investment presentations.

Asda, in its ex-dividend form, gave up 4p to 175.5p and Safeway 4.25p to 312p. Whitbread, now more a retailer than a brewer, lost 12p to 788p.

Barratt Developments, the house builder, was demolished 13p to 190.5p, its lowest for almost three years. Rival Beazer, off 8.5p at 140p, is due to report profits the week after next, with Barratt reporting towards the end of August.

Vaux dropped 19p to 278.5p, the lowest since takeover speculation gripped the shares earlier this year. The brewer and hotelier did receive an approach but talks were broken off. It has since said it is not involved in corporate discussions.

Hillsdown, due to split itself into three, shaded 3p to 158p as Unigate denied it had reopened bid talks.

Diageo, the spirits giant, put on 26p to 678p as Merrill Lynch made positive noises but Allied Domecq, despite a cautious trading statement and support from some analysts, softened 2p to 538p.

Rage Software, the computer games group, firmed 0.5p to 12.75p. There are suggestions that Eidos, off 40p at 672.5p, could pounce: the group has made no secret of its ambitions to expand through acquisitions. The feeling that it intends to shower its shares around is one reason behind their fall from 1,262.5p when it announced its takeover intentions in June.

Phytopharm, up 13.3p to 129.5p, has clinched the expected deal with a major drugs group: Pfizer turns out to be giant involved. It is collaborating over Phytopharm's obesity drug, which is seen as having intriguing prospects. But any drug will not arrive on the market before 2003.

Vymura, the wall coverings group, added 10p to 124p after multimillionaire Trevor Hemmings lifted his stake to 25.4 per cent, buying 810,000 shares.

Limelight, the hard-pressed bathrooms and kitchens group, firmed to 37p on talk of corporate action. The price was 200p last year.

Desire Petroleum, seeking oil and gas off the Falkland Islands, fell 20p to 130p, just one penny above its low. Reports of exciting developments have gone round, including stories of oil-soaked penguins sighted in the Falklands. Emerald Energy, which should be ready to report on its Colombian drilling, jumped 1.25p to 7.5p with, according to Seaq, nearly 29 million shares traded.

Ted Baker, the clothing group, firmed 10p to 137.5p following Charterhouse Tilney comments. Queens Moat Houses rose 2.5p to 28.25p after reports of bid action, seemingly from Hanover International run by Peter Eyles.

SEAQ VOLUME: 610.5m

SEAQ TRADES: 51,226

GILTS INDEX: n/a

ELECTRONIC FUNDRAISING, a lottery on the Internet, made a winning debut on the fringe Ofex share market, hitting 155p from the 100p at which shares were sold to investors to raise pounds 4.5m.

It is one of the strangest creations to arrive on the lightly-regulated market. Based at Borehamwood in Hertfordshire, it is licensed in Liechtenstein to run world-wide lottery games and weekly lotteries.

TOROTRAK, the transmissions group hived off from BTG, seems likely to crash out of the mid cap index next month. The shares shed 21.5p to 188.5p; they arrived last month at around 300p.

DMATEK, an Israeli company, jumped 11.5p to 42.5p on hopes it will benefit from electronic tagging. A government contract worth around pounds 100m, is possible and Dmaket supplies at least two firms in the running.

Suggested Topics
News
people'It can last and it's terrifying'
News
people Emma Watson addresses celebrity nude photo leak
News
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
Sport
Alexis Sanchez, Radamel Falcao, Diego Costa and Mario Balotelli
football
PROMOTED VIDEO
Sport
Danny Welbeck's Manchester United future is in doubt
footballGunners confirm signing from Manchester United
News
i100
Arts and Entertainment
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
News
ebooksAn unforgettable anthology of contemporary reportage
News
Kelly Brook
peopleA spokesperson said the support group was 'extremely disappointed'
Sport
Andy Murray celebrates a shot while playing Jo-Wilfried Tsonga
TennisWin sets up blockbuster US Open quarter-final against Djokovic
Arts and Entertainment
Hare’s a riddle: Kit Williams with the treasure linked to Masquerade
booksRiddling trilogy could net you $3m
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
News
news Video - hailed as 'most original' since Benedict Cumberbatch's
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Infrastructure Lead, (Trading, VCE, Converged, Hyper V)

£600 - £900 per day: Harrington Starr: Infrastructure Lead, (Trading infrastru...

Planning Manager (Training, Learning and Development) - London

£35000 - £38000 per annum + benefits: Ashdown Group: A highly successful, glob...

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

SQL Implementation Consultant (VB,C#, SQL, Java, Eclipse, integ

£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering