Market Report: Insurers wilt under the glare of the SIB

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The Independent Online
THE INQUIRY into personal pensions is weighing heavily on insurance shares. As the stock market continued to establish new highs, insurances wilted, with falls often extending into double figures.

Since the Securities & Investment Board's investigation became known on Friday, the sector has given ground as the stock market has established new highs.

Legal & General fell 13p to 519p, a two-day fall of 26p; Prudential Corporation lost 6.5p to 354p, a 16p two-day decline. Lloyds Abbey Life dropped 18p to 431p.

Composites also suffered, with Guardian Royal Exchange 7p lower at 200p following the Independent on Sunday's report that the Department of Trade and Industry had the insurer under 'constant review'.

Although trading was well below the heady levels achieved in last week's post-Budget euphoria, the stock market remained firm with the FT-SE 100 index edging forward to a record 3,237.3.

Hopes of lower interest rates were again a significant factor. Government stocks were strong, with yields on two-year gilts falling below 5 per cent and some stocks moving to new peaks. Demand ahead of tomorrow's auction was another influence.

Among equities Standard Chartered, the banking group, turned in another spectacular performance, up 40p to 1,193p. The shares scored from the improved outlook for the banking sector, the inevitable takeover speculation and a firm Hong Kong market. HSBC also felt the Hong Kong connection, up 22p at 777p.

Rolls-Royce, the aero-engine group, was the subject of a two- way pull, with NatWest Securities saying sell and Henderson Crosthwaite recommending a buy.

The shares opened firmer with talk of the long-mooted Pratt & Whitney link going the rounds. They ended 2.5p down at 171p.

Rank Organisation, Henderson's share for 1994, gave up some of Friday's gain, closing 4p down at 905p. The stockbroker is looking for profits of pounds 270m for the year ended October, pounds 320m for this year and then pounds 380m and pounds 450m. Over this period the dividend is set to go up from 31p to 38p.

Retailers drew strength from interest rate hopes and this week's expected vote on Sunday trading. Storehouse, supported by Goldman Sachs, advanced 6p to 228p.

Utilities were also beneficiaries of the interest rate fever.

The Granada bid for LWT (Holdings) failed to inspire a sector already rich from takeover speculation.

LWT was 1p higher at 586p; Granada fell 5p to 485p. Anglia, regarded by some as a possible Granada target, fell 27p to 424p.

Ladbroke, on indications it has withdrawn its controversial decision to embrace foreign income dividends, managed a 3p gain to 148p.

Tarmac, as meetings with stockbrokers got under way, edged forward 2p to 158p. Geest, the fresh food group also displaying its investment attractions, was little changed at 308p. Sleepy Kids, the animation group due to meet stockbrokers tomorrow, gained another 7p to 79p.

Saatchi & Saatchi, the advertising group, tumbled 23p to 157p on the trading warning, dragging WPP down 4p to 88p.

Scottish & Newcastle fell 14p to 524p following its results but Morland, the Thames Valley brewer, frothed 53p to 578p as stories resurfaced that Greene King will resume takeover hostilities.

Medeva, the drugs group, again came to life in late trading, suggesting renewed US interest. The price gained 4p to 139p, its highest since the shares were devastated in July by a surprise profit warning. There is even talk that the legendary investor George Soros is interested.

Calor, the gas group, shaded to 311p. SHV, the big Dutch investment group, has picked up 1,680,000 shares and now owns 49.07 per cent. Hardy Oil & Gas lost 1p to 145p. Societe Generale Strauss Turnbull said buy - the company has 'probably the greatest protection against the current oil price weakness'.

NFC, the freight group, reversed 12p to 240.5p on reports tomorrow's results will be accompanied by a rights issue.

Phonelink, which arrived at 155p in May, advanced 21p to 308p. The electronic information group has forged a link with BT which is launching a TeleDirectory, based on Phonelink software.

Another remarkable performer since its market debut, Bakyrchik, seeking gold in the former Soviet Union, enjoyed a heady session. The shares, floated at 120p in August, surged 50p to 309p.

Molynx Holdings, the closed circuit and security group, tumbled 10.5p to 41p as it disclosed a 'possible recommended' offer below the market price.

Micro Focus, the computer group, was again weak, down to 990p, off 43p.

The FT-SE 100 index edged to another peak - up 3.1 points to 3,237.3 - but the FT-SE 250 index ended 0.7 down at 3,565.8. The account ends on Friday with settlement on 20 December. Turnover was 601.9 million shares with 34,257 bargains.

London Wall Equities, created out of the ashes of the stockbroker Carr Kitcat & Aitken, completed its first big placing yesterday. It sold to institutions and private investors Brierley Investments' 35 per cent stake (1.2 million shares) in Caffyns, the family-run garage group, at 369.5p. Caffyns rose 30p to 378p. Assets are thought to comfortably exceed the listed 500p book valuation.

What was described as 'scrappy selling' pushed Dalepak to a new low, down 14p to 122p. The frozen and convenience food group has warned that its first half is likely to produce a break- even result. For the year to April the market is looking for pounds 1.3m. Profits last year fell from a pounds 3.9m peak to pounds 2.2m. The shares topped 400p when the company was riding high last year.