To many it looked like a dead cat bounce, with the fear of higher interest rates still lurking and recessionary influences nagging at confidence.
It should have been a far more spectacular revival. After all, with the Government taking the pressure off the building societies and sterling looking less exposed on the foreign exchange market, shares, regarded by most strategists as oversold, should have enjoyed a determined bounce.
Institutions are, however, more inclined to buy government stocks with their equity interest largely accommodated by the Wellcome flotation. Consequently trading remains thin with investor interest at a low ebb.
Some interest-sensitive stocks, such as retailers, made headway but there was little sign of life among the depressed builders and their suppliers.
Even some chunky trades failed to have much impact on turnover. Tarmac, on the hard- pressed building pitch, closed 2p lower at 71p after falling to 69p.
A line of 5 million shares was thought to have been traded at around 64p in a bed and breakfast tax deal.
Enterprise Oil fell 13p to 319p, unsettled by a trade in 400,000 shares at 318p.
The insurance broker Sedgwick rose 7p to 167p as it appeared that a line of 1 million was placed at 163p.
British Airways' long-signalled deal with USAir created a little excitement, lifting the shares 16p at one time. They closed 10p higher at 268p in often brisk trading.
A big option trade in British Petroleum had little impact, with the shares 3p higher at 203p. The trade exploited a tax loophole.
Hanson, the subject of recent profit downgrades, enjoyed support from SG Warburg and County NatWest, gaining 6p to 203p.
The Wellcome countdown and the Amsterdam Aids conference continued to draw attention to drug shares. The timing of Glaxo Holdings' decision to develop its 3TC Aids drug must have made things more uncomfortable for Robert Fleming, Wellcome's advisers. Glaxo, despite a fall in the level of its US shareholding, gained 28p to 716p. Wellcome fell 12p to 833p. SmithKline Beecham's figures inspired a 13.5p gain to 457p.
Simon Engineering held at 73.5p. Smith New Court believes the year's dividend will be cut by 40 per cent to 9.42p. But hard- pressed BM Group rose 15p to 94p following County's assertion that the shares, down from a year's high of 417p, were oversold and could go to 150p.
Hongkong and Shanghai Banking Corporation was intrigued as the Hong Kong dollar shares romped ahead to 367p, opening a 21p gap with the sterling-designated shares. A swing from losses to profits by HSBC's US operation was said to have prompted keen interest among Hong Kong investors, who are still linked to the Hong Kong dollar stock.
Mirror Group Newspapers again attracted support. The shares rose 5p to 63.5p with stake-building stories continuing to circulate. Since the shares were re-listed on Friday volume has been heavy with Seaq putting turnover at 41.5 million shares. Even allowing for double counting, the level of trading suggests stakes are being built ahead of expected bid action.
Reuters, however, had a poor session. A cautious statement with the interim results clipped the shares 25p to 1,126p.
Etam, the fashion retailer, improved 4p to 249p. There is speculation that Oceana, the South African-controlled group, will resume hostilities. It bid last year but failed to overcome a fierce Etam defence. Even so, Oceana ended up with 34.4 per cent of the capital.
Forte, the catering and hotel group, slipped a further 3p to 154p although the arch-bear Paul Slattery of Kleinwort Benson has turned more positive. He has been cautious for 14 months as the shares have fallen 40 per cent. 'We feel the worst is over,' he said.
But profits this year will emerge at only pounds 89m with pounds 141m pencilled in for next year. 'Shareholders who have shown remarkable loyalty over the past two years will need to remain patient for some time to come.' With a maintained dividend a 'high probability', putting the shares on an 8.5 per cent yield, he now rates them as a buy.
Leigh Interests, the waste disposal group, slipped 2p to 242p as a Swedish group announced a 3.25 per cent stake.
Hilclare, a lighting and security group, held at 45p. Stockbroker Wise Speke placed nearly 140,000 shares at 40p.
Speculation is mounting that the Monopolies and Mergers Commission has approved the pounds 510m breweries merger between Allied-Lyons and Carlsberg. The MMC report was sent to the Department for Trade and Industry last month. It is rumoured the DTI will approve the findings, releasing some of the adverse pressure on Allied, off 2p to 611p yesterday.
A takeover bid is looking increasingly likely for the Worth Investment Trust, where assets have fallen sharply. Scottish Value Trust, regarded as a fox in the investment trusts' cosy chicken coop, has acquired a further 1.4 million shares and now has almost 17 per cent. Worth shares held at 15p. They touched 80p three years ago. SVT is 62.5p.Reuse content