Market Report: More index distortions as RMC returns to Footsie

RMC, the building materials group, had the dubious distinction of "celebrating" its return to Footsie with a 12.5 per cent fall.

The shares, as rogue trades were cleared out of the order book, fell 175p to 1,225p.

The ramifications of the RMC debacle do not, however, end with a share price adjustment. It is a development which would have created confusion in some corner of the land should the Monday closing price have been essential for, say, an estate valuation. And the two major stock market indices have been thrown by the maverick RMC trades.

On Monday, as RMC soared on the back of the rogue deals, the FTSE 250 mid cap index was clearly inflated. And yesterday, as the company joined Footsie, the subsequent downward adjustment eroded the closing Footsie calculation of 5,842.3 points, up 4.4.

The index distortions were underlined by the display by Royal & Sun Alliance, the insurance group. The shares, as the market closed, soared on the back of a trade of just 2,500 shares at 700p. If reason had prevailed the closing price would at best have been 674p but more realistically 648p. The fictitious close, which was used for the Footsie closing calculation or for any portfolio valuation, was an unjustified 700p, up 62p.

Daily Mail & General Trust non voting "A" shares have been accorded what is at best the mixed blessing of joining the order book. Trading on the book, which accounts for little more than 30 per cent of the available turnover, starts today. The shares closed 135p higher at 3,135p. The powerful ordinary shares, which control the company, will remain subject to the old market-making system.

The distortion created by the 2,500 Royal Sun sale merely underlines the dangers of the Stock Exchange's decision to remove the minimum size for order-driven deals. There are worries that even a 50-share order could create the sort of havoc which has been evident at RMC and Royal Sun. Few market men believe the minimum deal and other changes announced last week will do much to cure the obvious weaknesses of such an unfriendly system.

CGU, the result of the Commercial Union-General Accident insurance merger which created the RMC Footsie vacancy, ended its first day 27p lower at 1,094p.

The rest of the stock market experienced a lacklustre session. Results helped alleviate the boredom with National Grid and Vodafone enjoying favourable figures.

Lloyds TSB rose 12p to 887p despite profit downgradings from ABN Amro and Schroders on pension misselling. The two houses lowered profit forecasts, in ABN's case by pounds 300m to pounds 3.35bn.

Shell firmed 3.5p to 448p on its proposed Iranian expansion, and the Falkland flyers continued to recover with Desire Petroleum up 32.5p to 322.5p.

Reuters responded to a Lehman Brothers target of 802p with a 7p lift to 713p and Independent Insurance jumped 32.5p to 374p on bid talk.

HR Owen, the upmarket car dealer, purred 2.35p ahead to 17.25p although takeover hopes faded following the sale by Ong Beng Seng, the Malaysian tycoon, of 32.7 million shares. His stake is now 9.9 per cent. The group's chief executive, Nicholas Lancaster, picked up 17.8 million of the shares at 17.25p with institutions acquiring the rest. Mr. Lancaster now has 21.7 per cent.

Bid hopes also evaporated at Filofax, off 17.5p to 161.5p. The company has been talking to would-be buyers since April but a deal has not been concluded.

Bass, Cadbury Schweppes and SmithKline Beecham largely brushed aside the fizzy drinks scare but building shares, on the back of profit upgradings, edged ahead. Newcomer James R Knowles, a construction support group, ended at 96.5p against an 85p placing. But Polypipe fell 16p to 172p after Charterhouse Tilney made cautious noises.

Oasis Stores jumped 28p to 202p following a sales upsurge; More, the advertising group, was little changed at 1,105p as Clear Channel, the US group, finally ended the bid argument by increasing its shareholding to 51.3 per cent.

Geo Interactive Media improved 16.5p to 176.5p as 18 million shares were placed at 145p. The internet software group intends to move from AIM to full listing.

Tricorder, a developer of 3D technology, is moving from Ofex to AIM. It fixed up two contracts, supplying a 3D scanner to an NHS burns unit and a 3D camera to the Victoria & Albert Museum. The company suffered a loss of pounds 868,000.

Powerscreen, the troubled engineer, endured another bruising session, falling 22p to 65.5p; the shares were 762.5p in October.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Arts and Entertainment
Lionel Richie has made the top spot after a strong Glastonbury performance
musicAnd what's more it's the last Sunday night chart topper - ever!
News
news
Life and Style
The collection displayed Versace’s softer side, with models wearing flowers and chiffon dresses in unusual colourings
fashionVersace haute couture review
Arts and Entertainment
DJ Chris Moyles who claimed to be a second-hand car dealer in a bid to save up to £1 million in tax, a tribunal has found
radio
Arts and Entertainment
'The Leaf'
artYes, it's a leaf, but a potentially very expensive one
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

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate