Market Report: Investors climb the peaks as sellers stay at home

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The Independent Online
SHARES turned in another stratospheric display with experienced market men becoming increasingly baffled (and overworked) by the sheer weight of buying orders and the almost universal reluctance to sell.

The stock market is having its busiest - and most profitable - time since the crash of 1987. As if to underline the rich rewards being reaped, the Stock Exchange proudly announced that December's frantic activity had put the seal on a multi-record-breaking year.

In all, 1993 created eight new peaks, excluding the almost relentless advance by shares, with all leading indices establishing new highs, many of which have been broken in the first week of 1994.

Among the eight records were a rights issue high of pounds 11.38bn, equity turnover of pounds 1,143.5bn and an inflow of pounds 57.23bn from the sale of government stocks.

New issues, however, was one area where the record-breaking run faltered.

Although a peak 180 companies came to market, the pounds 5.96bn raised paled against the pounds 8.87bn pulled in during 1986.

For the third time this week turnover topped the one billion mark, with investors big and small again devoting much of their resources to second and third-line stocks.

The FT-SE 100 index ended 43 points higher at 3,446, only 16 below the peak established last week. But the FT-SE 250 index continued to underline the stampede into non-Footsie shares, roaring ahead 63.5 to a 3,912.5 peak. Turnover figures showed that FT-SE 100 shares accounted for about one third of the turnover of 1,041.2 million shares.

Datastream calculated that the day's activity added more than pounds 11bn to shares, putting the market's value at pounds 847bn.

The now familiar influences of economic recovery and lower interest rates were again the main driving forces.

The Americans gave interest- rate hopes a boost when they announced employment figures that should remove the pressure for higher rates.

Takeover rumours continued to swirl, with the Reuters bid story refusing to lie down. The shares rose 41p to 1,864p, with the mooted striker Reed International up 11p at 905p.

Fisons, widely tipped as a takeover candidate, ran out of steam. A statement from Astra that it was not interested in buying the group did the damage, although in the current round of speculation, few had linked the Swedish drugs giant with Fisons.

Zeneca, which has remained silent, is the market's favourite candidate, although Canadian and Italian predators loomed large as the rumours gathered strength.

Fisons edged a copper higher in early trading but then fell to 138p before a little late buying pushed the shares to 142p, down 4p on the day.

Kingfisher was another conspicuous absentee from the romp. Worries that the Comet and Woolworth group has had a Dixons- style Christmas trading experience are causing the concern. The shares fell 18p to 729p.

Drugs also bucked the trend. Glaxo Holdings fell 15p to 664p with US influences, largely the bearish Goldman Sachs, hitting the price. Medeva rose 9p to 149p on its link with Proteus International, up 17p at 448p.

United Newspapers, down 23p to 662p, suffered from a rumoured profit downgrading, thought to be by NatWest Securities.

But BT, although ending below its best, managed to hold on to an 8p gain to 474p, despite talk of less-than-bullish meetings with analysts. Barclays de Zoete Wedd rates the shares a buy.

Laporte, the chemical group, was another in contact with analysts, climbing 27p to 767p. Its message seemed to be that forecasts will be met and debt is being reduced.

NFC, likely to regain its membership of the FT-SE 100 index following its rights issue, jumped 19p to 270p.

RTZ was strong, rising 19p to 842p. The stockbroker T Hoare is keen on the shares, forecasting earnings per share rising to 35.5p for last year and 42.3p for this. It regards the shares as a long-term buy.

Tomkins, the bread to guns conglomerate that has been short of friends, gained 8p to 262p, despite the appearance of another sell note.

Williams de Broe said: 'Major shareholders of Tomkins shares should continue to take profits. Potential purchasers can afford to bide their time.'

The stockbroker forecasts profits of pounds 253m for this year and pounds 277m for next.

Oils remained in demand, helped by a firm crude oil price and continuing talk of an Opec meeting to cut production quotas.

Bass improved 18p to 588p, inspired by renewed talk that it plans to sell its soft-drinks side.

The property adviser de Morgan edged ahead 1p to 17p as it confirmed speculation it had a big acquisition in its sights.

The FT-SE 100 index rose 43 points to 3,446 and the FT-SE 250 index 63.5 to a 3,912.5 peak. Turnover was 1,045.7 million shares with 41,496 bargains. The account ends on 14 January with settlement on 24 January. Gilts gained up to a point.

Any fringe share seems to have a fan club these days. Stanalco, an industrial heating business, has hardly stirred in the past three years, but yesterday it jumped from 0.5p to 3p, ending at 1.25p. No explanation was forthcoming. Once called Merchant Manufacturing Estate Co, it made profits of pounds 39,000 in the year to February. The shares peaked at 37p in 1988.

Birkdale, the advertising and public relations group that is now largely a marketing and design group, has attracted keen interest this week. In busy trading the shares rose 1p to 10p yesterday. The group has experienced false dawns but there are growing hopes that new chief executive George Makulski will make it a significant force in marketing and design.

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