MARKET REPORT :Market eyes are once more focused on financial sector

Shares of Smith New Court climbed to within a whisker of their all-time high as some of the more astute speculators took the view that the latest financial takeover merely underlined the vulnerability of London's leading independent securities house.

The shares, in brisk rather than busy trading, climbed 30p to 484p with Abbey National's not entirely unexpected swoop on First National Finance Corporation providing the latest incentive.

Rothschild, the merchant bank, sits on 20.1 per cent of Smith and the popular view is it would be happy to sell. Schroders, the investment group which needs to strengthen its limited securities operations, is the obvious predator.

But the German Commerzbank, which grabbed control of Jupiter Tyndall, the fund manager, has emerged as the market's favourite to strike.

Some feel Schroders and Smith would not be a comfortable fit. Perhaps Schroders could satisfy its need for a bigger share dealing role by moving in on Cazenove which could feel the need to join with a bigger group in the more volatile climate which has engulfed the industry..

Smith has looked increasingly vulnerable since announcing last month a profit slump from pounds 95.2m to pounds 31.2m. It has also indulged in the prevalent City practice of sacking staff. And Abbey Life, one of the country's largest life funds, has curtailed dealing with Smith until the end of the year because of the securities house's involvement in the disastrous flotation of Aerostructures Hamble.

Speculation about activity in the financial world has been running high in recent months, fuelled by the fall of SG Warburg, once regarded as London's premier securities house, to Swiss Bank Corporation this year and Commerzbank's move on Jupiter. Then came Kleinwort Benson's pounds 1bn agreed bid from Dresdner Bank. Now FNFC, once tottering on the brink of disaster and rescued by a Bank of England life boat, has accepted a pounds 285m offer from Abbey, seeking more unsecured loan exposure. FNFC, where a big seller is said to have tried unsuccessfully to unload stock recently, rose 18.5p to 108.5p.

With London regarded as Europe's financial centre the remaining opportunities for overseas groups needing to achieve a quick presence in the square mile are becoming increasingly rare.

The rest of the stock market, ahead of the result of the Tory showdown, was in ebullient form with many betting - correctly - on a decisive Major victory. The FT-SE 100 index ended 25.5 points higher at 3,349.2. Significantly utilities were strong ahead of the result with electricities, helped by the added prospect of a soft Littlechild review on Friday, leading the way.

BT, with the prospect of freedom on line rental charges, advance 7p to 396.5p. It is suggested that the industry regulator, Don Cruickshank, is prepared to sanction such a development when he makes recommendations later this month.

Scottish & Newcastle, on hopes of a Courage clearance, jumped 15p to 573, pulling other brewers higher.

Supermarkets were firm, with UBS offering support. Argyll gained 5p to 338p; Asda 1.5p to 96.5p, J Sainsbury 9p to 451p and Tesco 9p to 298.5p. Dalgety, confirming the sale of Golden Wonder pot noodles to CPC, rose 4p to 445p.

The British Gas headquarters shake-up lifted the shares 6.5p to 295p. Arjo Wiggins Appleton, up 10p to 274p, continued to enjoy Panmure Gordon support.

Profit caution from Domestic & General, the insurance group, left the shares 155p lower at 1,115p. Worries about property prospects lowered P&O 12p to 571p and Smith New Court unease over RMC left the shares a shade lighter at 1,053p. The housing gloom hit George Wimpey, off 4p at 110p, and Tarmac, 3.5p at 109p. Vodafone was caught by a negative Kleinwort Benson approach, off 3p at 230.5p.

Metro Radio gained another 24p to 513p on expected bid action but Yorkshire- Tyne Tees slipped 11p to 586p following the sales link with Granada, up 10p at 625p.

Medeva continued to express doubts about the signalled Fisons take over bid, falling a further 5p to 237p.

Merchant Retail, a department store and supermarket group, added 1.25p to 17.25p on hopes of reorganisation details, and Wellington, a chemical group, firmed to 200p following the sale of a Manchester rubber operation. Profit forecasts for this year have been lifted to around pounds 4.9m.

Welpac, the loss making do-it-yourself supplier held at 6p. Its results are overdue and the delay is thought to be hindering the proposed take over bid. Any offer, however, will be below the market price. Some talk in terms of 4p a share.

News
The surrealist comedian at the Q Awards in 2010
people
News
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Sport
Christiano Ronaldo enjoys his opening goal
champions leagueLiverpool 0 Real Madrid 3: Ronaldo and Benzema run Reds ragged to avenge thrashing from their last visit to Anfield
Arts and Entertainment
Awesome foursome: Sam Smith shows off his awards
music22-year-old confirms he is 2014’s breakout British music success
PROMOTED VIDEO
Life and Style
Six of the 76 Goats' cheese samples contained a significant amount of sheep's cheese
food + drink
Arts and Entertainment
Contestants during this summer's Celebrity Big Brother grand finale
tvBroadcaster attempts to change its image following sale to American media group
Extras
indybest
Arts and Entertainment
Sir Nicholas Serota has been a feature in the Power 100 top ten since its 2002 launch
art
Arts and Entertainment
Sarah Dales attempts to sell British Breeze in the luxury scent task
tvReview: 'Apprentice' candidate on the verge of tears as they were ejected from the boardroom
News
Call me Superman: one of many unusual names chosen by Chinese students
newsChinese state TV offers advice for citizens picking a Western moniker
News
ebooksAn unforgettable anthology of contemporary reportage
News
Wilko Johnson is currently on his farewell tour
people
Voices
New look: Zellweger at Elle's Women in Hollywood awards on Monday
voicesRenée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity, says Amanda Hess
News
Let’s pretend: KidZania in Tokyo
educationKidZania lets children try their hands at being a firefighter, doctor or factory worker for the day
Life and Style
CHARGE BOOSTER: Aeroplane mode doesn't sound very exciting, but it can be a (phone) hacker's friend. Turning on the option while charging your mobile will increase the speed at which your phone battery charges
techNew book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone
Arts and Entertainment
Julianne Moore and Ellen Page are starring together in civil rights drama Freeheld
film
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?