Market Report: Merrymaking as New York loosens the apron strings

INTEREST rate speculation provided the spur as shares started the last trading account before rolling settlement shorn of their usual guidance from New York.

The FT-SE 100 gained 34 points to 2,970.4 as this week's expected increase in US interest rates was shrugged aside in favour of gathering hopes that Germany and Japan would counter by pushing their rates down.

However, with New York closed for Independence Day the London market had a rather academic, even unreal, feel. Trading was often thin and the lack of New York direction was painfully apparent.

Just why London is so dependent on the US is baffling, given Britain's much greater involvement in Europe. But it only takes a New York shutdown to illustrate the powerful relationship between the two centres.

The latest batch of Whitehall economic statistics, in effect, cancelled themselves out. But, with currency markets much calmer and hopes that the dollar will be able to draw some comfort from the Group of Seven meeting in Naples, there were no outside restraints on a little merrymaking in the summer sunshine.

Government stocks joined in, with gains of up to half a point.

The latest twist in the German interest rate saga had the predictable knee-jerk reaction at Redland, up 15p to 510p, and RMC, 29p ahead at 863p.

But the euphoria spread through interest rate-sensitive sectors.

Builders and building materials shares made headway. Barratt Developments gained 6p to 202p and Blue Circle Industries rose 13p to 304p. BCI enjoyed the added support of at least two buy recommendations - the lingering impact of last week's Panmure Gordon exercise and a Cazenove shot yesterday.

Oils were fuelled by optimism over the crude price. British Petroleum was 2p higher at 394p and Shell up 8p at 692p. Nomura added to the Shell excitement by claiming the proposed deal with Gencor should be worth 3p a share.

As the turmoil continued over the failed bid for Lasmo, Enterprise Oil fell 9.5p to 389p. Lasmo improved 3p to 139p.

Telephones were busy following the latest mobile figures. BT improved 7p to 376p with the partly-paid 8p higher at 257p, Securicor put on 20p to 1,180p with the 'A' shares 28p up at 820p and Security Services was 15p firmer at 625p. Vodafone gained 10p to 509p.

British Gas, thought to have held a lunchtime meeting, improved 5.5p to 272.5p but electricities, strong recently, were hit by profit-taking. Waters moved ahead, helped by NatWest Securities support.

Inchcape slipped 7p to 439p despite rumours that a favourable Robert Fleming Securities report is about to appear.

General Electric Co, due to report figures tomorrow, gained 3.5p to 291.5p. The shares had been higher on the group's involvement in a pounds 5.4bn China order and bullish comments from US investment houses.

But an Office of Fair Trading probe into the Hotpoint operation took the shine off the performance. Year's profits nudging pounds 900m are expected.

Shanks & McEwan, the waste disposal group, gained 4p to 88p on suggestions that Ocean, down 3p to 278p, is considering a bid.

Kembrey, an electrical group that recently clawed its way from losses into modest profits, rose 3.5p to 14.5p following a takeover appoach.

Coda, a computer group that came to market in February at 235p, crashed 54p to 168p in response to interim results. Maid, a computer group under pressure since coming to market at 110p in March, rallied 9p to stand at half its flotation price.

Heritage, the household goods group that produced a profits warning late on Friday, retreated 14p to 60p. Casket, the clothing and cycling group, fell a further 3p to 35.5p on its profit warning.

Caldwell Investments, a clothing group, gave up 9p to 49p on disappointing figures.

Hobson, the food group thought to be negotiating the sale of some of its recently acquired Co-op food business, was firm at 21p on talk of a deal with Yorkshire Food, up 2p at 121p.

Hartstone, the struggling leather group, lost 3.5p to 34p following reports that it may seek a rescue rights issue of up to pounds 40m.

Holmes Protection, the security business, gained 5p to 24p. A US investment consortium is pumping dollars 10m into the New York group in exchange for a 34 per cent interest. Holmes intends to seek a US share presence, delisting from London.

Aminex, the first of the Irish oil groups to move into the former Soviet Union, jumped 8p to 70p. The group has powerful support in the Russian establishment and there is talk of two developments that would considerably strengthen its position. It is also developing in Pakistan where hopes are running high that another Irish oil group, Tullow, has made a rich find.

Robert Ware and Dafydd Jones, who ran Clayform before it became Development Securities when Martin Landau moved in, are joining Dunton, the brickmaking and property group where David Williams, chairman, has organised a restructuring. They have each acquired 9.4 per cent of the shares at 1.8p. Mr Ware will become managing director. Dunton firmed to 7.5p.

The FT-SE 100 index rose 34 points to 2,970.4 and the supporting FT-SE 250 index 14.6 to 3,430.4. Turnover was 483.3 million shares with 21,849 bargains recorded. The account, the last before rolling settlement is introduced, ends on 25 July.

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