Market Report: London, for once, shows New York the way

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It was the craziest day the stock market has witnessed for years. Such was the chaos and confusion some blue chips were almost untradeable with banks and exporters making much of the hay in the autumnal sunshine.

At one time Footsie was up 178 points. It closed up 160.8, its biggest one-day gain, beating the 136.2 surge in April, 1992, when John Major achieved his unexpected election victory. According to Datastream the market's value jumped by pounds 35.6bn.

The weakness of sterling helped excite exporters; financials were mesmerised by the perceived benefits of EMU and the rest of the market was dragged along in joyous, if not fully comprehending, celebration. It was as if London, just for once, was showing New York the way. True, the Americans had some favourable economic indicators to enjoy but there seemed evidence that the Dow Jones Average, after three days of losses, was taking a leaf out of London's book - at least in early trading.

Financial shares led the charge. National Westminster Bank, for long buoyed by hopes of corporate activity, soared 85.5p to 944p. Barclays put on 135.5p to 1,664.5p and HSBC 141.5p to 2,165p. Insurances joined in with General Accident 89.5p higher at 1,080p and Prudential Corporation 52.5p stronger at 684p.

Britain's industry heart was represented by the likes of TI, up 57.5p to 664p, GKN, up 90p to 1,419.5p and Siebe up 67p to 1,225.5p.

Retailers and others were in fine form, reflecting the market's excitement more than any expected EMU benefits.

Footsie's rampant advance to yet another peak - 5, 226.3 - was achieved on busy turnover although it could be argued such a jump deserved more than the 1 billion share volume recorded. The index smashed its previous record, hit six weeks ago, by 140 points.

The incredible day will bring yet more pressure to bear on the unfortunate fund managers who have failed to enjoy this year's bull run. At the start of the year Footsie was 4,118.5. Most strategists were then cautious with a year-end target of 4,600 points the most bullish forecast.

On most accepted valuation yardsticks blue chips are overvalued. But compared with many overseas markets London still does not look expensive and throughout the bull run there have been signs of foreign buying.

For once the party was not confined to the big boys. The supporting FTSE 250 index was up 92.9 points to 4,809.1, a peak, and the FTSE SmallCaps index rose 14.2 to 2,321.1.

Normally rip roaring market displays are accompanied by a few takeover bids and a spread of rumours. Such was yesterday's headlong gallop that few had time to even ponder any speculative talk. Still one major bid did appear - a US strike at T&N, the vehicle components group, which roared ahead 60.5p to 242.5p.

Among those to miss the fun were publisher Reed International picked an up, up and away day to discover accountancy irregularities at one of its travel publishing operations, fell 49.5p to 536.5p.

Some brewers and pub companies remained subdued with Scottish & Newcastle, the biggest of them all, off 9p at 714p. NatWest Securities has adopted a cautious stance - pub customers, it says, are voting with their feet "and we recommend that investors follow suit".

Great Universal Stores lost ground after a far from upbeat trading statement. Saudi Arabian influences weighed on British Aerospace.

Industrial Control, with trading below expectations and Peter Hall quitting as chief executive, slumped 78.5p to 65p. Stanford Rook, ahead of next week's expected results of its long-running and extensive TB trials in South Africa, put on 34p to 531.5p.

FKI, the engineer, strengthened 16p to 211p helped by Panmure Gordon support and Storehouse, backed by Morgan Stanley, was 4.5p higher at 243.5p. It has a 12 month target of 275p.

Stordata Solutions, expecting a second-half loss dipped 2.75p to 5.75p and Hawtal Whiting, romping ahead recently on talk of a significant US deal, lost 23p to 91p after chairman John Whitecross said he no longer expected a profit this year.

Taking Stock

As Northern Rock nears its market debut JP Cairngorm Asset Management has launched an investment trust to take advantage of flotations and takeovers of mutual funds. It expects action in the next few years with the industry being increasingly dominated by giant groups. Shares are being sold at 100p, with warrants, to raise pounds 100m.

Metal Exploration, once a volatile Australian mining performer, is being transformed into an investment vehicle. Around half its shares are held in this country. Laurie Beevers of stockbroker WH Ireland and fund manager Garnet Harrison have 10 per cent and MAM 20 per cent.

Hambros Insurance Services fell 10.5p to 101p after Fishers International dropped itspounds 84m takeover proposal. Fishers dipped 1p to 22.5p.