Yesterday the FT-SE index, measuring 100 blue chips, continued its ragged retreat, falling another 25.8 points to 2,773.4 in moderate trading.
Fears that a big rights issue is about to be launched and a gathering suspicion that the Government will be forced into unpopular tax changes dampened the stock market climate.
Even the second liners felt the chill of uncertainty, with the FT- SE 250 index down 42.8 to 2,889.9. But it has performed much more strongly than the FT- SE 100 this year.
Commercial Union emerged as the favourite rights candidate. The shares fell 16p to 618p. Other composite insurers were also unsettled by rights rumours.
Allied-Lyons, down 7p at 618p, British Petroleum, little changed at 236p, the engineer Siebe, 21p lower at 430p and Unilever, 20p off at 1,069p, were among others drawn into the cash-call whirlpool.
Unilever also had to contend with some negative analyst comment from Panmure Gordon and Smith New Court.
The Anglo-Dutch detergent and food giant obtains up to 20 per cent of its profits from the rapidly declining German market, with Europe accounting for 40 per cent. Unilever shares have performed well in the past two years but the securities houses expected underperformance in the next two.
The pre-Budget debate led to worries that overseas investors could be frightened into reducing their UK portfolios if what they regard as Thatcherite symbols come under attack. One suggestion said to be unsettling foreigners was that mortgage tax relief for homeowners would be cut or phased out.
Cadbury Schweppes was ruffled by a profit downgrading, thought to be from Lehman Brothers, falling 7p to 455p. Hillsdown Holdings, meeting analysts and fund managers, fell 10p to 134p. Profit forecasts are being pulled back from the pounds 160m level to pounds 150m.
Guinness, expected to meet analysts this week, was little changed at 494p.
TI Group, the engineer, was hit by revelations in the Independent on Sunday that the US government is investigating possible overcharging by its Dowty Woodville Polymer Engineering subsidiary. The shares touched 295p, closing at 298p, down 10p.
MB Caradon, the building products and security printing group, dropped 12p to 296p as Carr Kitcat & Aitken said 'take profits'.
Rugby Group dipped 11p to 219p. SG Warburg lowered its profit forecasts from pounds 58m to pounds 56m and from pounds 60m to pounds 52.5m.
Ladbroke Group closed 1p down at 193p. Word is that it will soon announce a significant UK property disposal. US property sales are also likely.
Lasmo, the oil group, had another dull session, down 5p to 151p. NatWest Securities recently changed its recommendation from sell to hold. It feels the shares have fallen enough to reflect the group's difficulties.
Store shares had a difficult time. Alexon was hit by rumours of another profit warning, tumbling 26p before settling uneasily at 82p, down 17p. The shares touched 382p last year. A Christmas trading statement is expected soon.
Dixons, interim results tomorrow, fell 12p to 262p and Boots 9p to 500p.
HSBC, the banking group, edged ahead 3p to 519p. Robert Fleming is to market 25 million call warrants running to January 1995. Indicated price is 113.3p.
NFC, the freight group, fell 7p to 276p. Peter Sherlock, who quit as a director of the Bass brewing group last year, is to take over as chief executive. Bass fell 10p to 600p as Kleinwort Benson said sell.
Much of the activity was down among the smaller fry. Acorn Computers, one of last year's best-performing shares, spurted 13.5p to 54.5p (after 62p) on a microchip development. A company in which it has a 49 per cent interest has produced a chip that is expected to be taken up by multinationals and 70 software houses.
Ratners Group, the struggling jeweller, was busily traded, down 1.75p to 11.75p. Acsis Group, in sales promotion and health care, also enjoyed busy trading as speculators pursued recovery hopes. The shares managed a 50 per cent gain to 1.5p.
Pifco, the electrical group, continued to reflect Hoare Govett profit upgrades with the 'A' shares up 25p at 365p.
Invergordon Distillers remained under the weather, down 10p to 291p, following profit downgrades, and First National Finance Corporation lost 6p to 54p ahead of Friday's expected rights issue.
Trading was swollen by some heavy trading in low- price shares. Seaq put turnover at 592.7 million shares but 381.5 million was among second liners and tiddlers. The FT-SE 100 index fell 25.8 points to 2,773.4 and the FT-SE 250 index 42.8 to 2,889.9. Government stocks fell by up to pounds 3/4
The Shaftesbury property group is reaping rich rewards from Soho's Chinatown. It has 34 freehold buildings and 90 tenants in the Chinese quarter, where the recession is ignored as trading booms. It is one area where property values are increasing. Lloyds (Bank) Investment Managers has in recent weeks lifted its stake to just over 21 per cent. The shares are 39p.
Dealings are due to start today in shares of Trio Holdings, an investment trust that raised pounds 25m through a placing and rights issue to buy Martin Bierbaum, the international money broker. David Hagan, who headed the equity inter-dealer broking side of Tullett & Tokyo, leads Trio. Suspended at 55p, Trio's shares are expected to trade between 60p and 65p.Reuse content