Market Report: Frenetic trading sees shares hit new high

SHARES tempted fate, roaring to new highs just ahead of the anniversary of the traumatic 1987 crash. The FT-SE 100 index soared 34.5 points to 3,120.8. At one time it was up more than 40 points.

A variety of factors contributed to the high-flying end to the account. Interest rate hopes were prominent and, despite some poor statistics this week, the stock market remains convinced the economic recovery remains on course.

But overseas influences were strong. Futures trading, with the Americans to the fore, set the early tone. US investors were also active in the cash market with, for example, Imperial Chemical Industries, up 10p to 729p, attracting their attention on yield considerations.

American interest was also evident among telecommunications shares following the proposed dollars 60bn Bell Atlantic deal with Tele-Communications.

The big oversubscription for the privatisation of BNP, the French bank, was another factor as much of the rejected British cash was quickly pumped into the market. The strength of the Hong Kong market and a firm New York opening also contributed to the euphoria.

Trading among blue chips was often frenetic - 'blistering', one dealer said - although interest in the 250 constituents of the second-line index was less hectic. In fact the FT-SE 250 index, although up 14 to 3,478.4, ended more than 30 points below its peak, hit in August. But there was considerable activity among some of the tiddlers, with substantial lines of stock going through.

In the account the blue chip index rose 81.5 with the 250 measurement up 53.5.

Cable and Wireless had another outstanding session, at one time nudging pounds 10. The shares encountered late profit-taking, ending 15p higher at 968p. BT was another that failed to hold a hectic opening pace, closing 9.5p better at 456.5p. The partly-paid jumped 9.5p to 207p.

Micro Focus, weak following investment meetings, rallied 130p to 1,430p as it said it knew of no reason for the decline.

BT, planning to take a 20 per cent interest in MCI Communications, the US group, could score from the planned flotation of Inmarsat, the international satellite operation, where it is the second-largest shareholder, with an 11.7 per cent interest. Inmarsat is expected to command a price of pounds 1.3bn.

HSBC, the banking group, was another to reflect the strength of the Hong Kong market, gaining 10p to 756p. Standard Chartered was also up on Oriental influences, improving 10p to 1,024p.

Interest rate hopes lifted other banks. Lloyds, with its stake in Standard, gained 14p to 577p.

Storehouse improved 4p to 203p towards the close as Panmure Gordon finally placed 5 million shares that had been overhanging the market at 200p .

M&W, the convenience shops group, said it had not received any takeover approach. The shares, at one time at 156p, ended 6p higher at a 149p peak. Betterware, the direct selling group, encountered selling, down 8p at 195p.

British Airways failed to hold its best level as a two-way pull developed between PG and Yamaichi. The shares, at one time up 5p, ended 3p higher at 381.5p.

PG, forecasting profits of pounds 325m this year, regards the shares as a buy; Yamaichi, with a figure of pounds 270m in its sights, said sell.

Some defence stocks missed the fun as investors fretted about possible cuts in next month's Budget. General Electric Co lost 9p to 344p.

Greycoat, the on-the-brink property group where shareholders rejected a rescue scheme masterminded by Postel, rose 4p to 31p, a two-day gain of 10p. Talk of takeover action and new rescue moves are in the air. Greycoat said discussions were unlikely to produce proposals 'before the latter part of next week'.

Sleepy Kids, the animation group, put on another 3p to 56p following a deal with Carlton Communications.

Blue chips jumped to a new peak with the FT-SE 100 index up 34.5 points to 3,120.8. The FT-SE 250 index improved 15.4 points to 3,479.8. Turnover was almost 800 million shares with 39,281 bargains logged.

Bristol Scotts, with greyhound, property and restaurant interests, has come to life this week. The shares advanced 22p to 73p. The loss-making company has had an eventful time in recent years. It is run and controlled by the Kerman family. Losses have been made in the past four years. There are, however, some impressive assets, incluing London's Scotts Restaurant.

Curious goings-on at Baldwin, the holiday and restaurant group. Martin Moir, the veteran of many a shareholder battle, is trying to put pressure on Ong Beng Seng, a Singapore businessman with a 21.5 per cent stake, to shake up the group. Mr Moir also seems to be complaining about another shareholder, thought to be David Shamoon.