Market Report: Motor results drive spree on equities

SHARE PRICES yesterday recorded their largest gains since the day after the election, largely buoyed by enthusiasm on Wall Street for the return to profit by the American car manufacturers Ford and Chrysler.

The FT-SE 100 share index, which hit the year's low on Monday, closed 49.8 points higher at 2,423.2, making a two-day gain of 75.2.

Trading volumes were slightly better, and above the market's break-even level at 566 million shares.

Besides the pull from America, the London market took heart from the absence of any shocks from corporate results pushed out by BT and BAT.

Despite the sharp drop in first quarter profits, shares in BT moved ahead to 13p to 346p. BAT, which announced interim profits ahead from pounds 415m to pounds 645m, climbed 32p to 766p.

Leading international stocks benefited most from Wall Street's advance. Glaxo, up 19p to 730p, SmithKline Beecham, up 9p to 467p, and Reuters, up 7p to pounds 10.34 were typical examples.

However, some traders were concerned about the foundations under yesterday's rally, considering the continued plight of the Tokyo market. The Nikkei 225 index hit a six-year low with a 330-point drop to 15,095.95.

Legal & General Investments believes the Nikkei index still has further to fall, and is forecasting a drop of another 1,000 points or more. The latest issue of Fundamentals, its newsletter, says the investment house will be prepared to buy at around 13,750.

Back in London, only a dozen FT-SE constituents registered falls. Of those, Tate & Lyle was knocked 11p to 293p as Smith New Court and County NatWest followed Hoare Govett's lead and downgraded profit expectations.

Concern is being expressed about the company's North American business, in particular growing competition in the artificial sweeteners market.

Smith also downgraded Ranks Hovis McDougall, lopping pounds 31m off its pre-tax profit projection for 1993 to pounds 228m. The house, however, still rates the shares, up 8p to 185p, as a buy on a safe- looking dividend.

On the trading front, there was talk that BZW Investment Management had started to re- invest the proceeds from the Wellcome Trust issue.

Wellcome, whose issue was struck at 800p per share, had a better session, edging up 5p to 807p.

One of the heaviest-traded stocks of the day was Pilkington, the glass maker, where a large bed and breakfast deal boosted volume to 10 million. Pilkington gained 5p to 94p.

The property sector, however, was left out in the cold. BZW has taken a fresh look at asset values, and has moved from expectations of 5 per cent capital growth next year to a 6 per cent fall.

BZW said post-election euphoria had fizzled out, and that the property sector was in much need of a sharp decline in unemployment.

The house's bearish sentiment affected several property stocks. Hammerson ordinary dipped 19p to 269p and the 'A' fell 19p to 239p, MEPC lost 10p to 243p, British Land eased 6p to 168p and Land Securities gave up 3p to 373p.

Building material companies, on the other hand, were firmer. RMC moved back above 500p, with a rise of 12p to 501p, Redland increased 18p to 465p, and BPB put on 5p to 154p.

Guinness, ahead by 10p to 544p, continued to benefit from the European excise duty deal. Similarly, Grand Metropolitan recouped some recent losses with an 8p push to 423p.

Allied-Lyons, also a Scotch producer, closed at 615.5p, up 13.5p, although the mark-up had more to do with the clearance on Tuesday of the company's brewing merger with Carlsberg.

In leisure, Airtours sprinted 22p to 253p after confirming a late surge in summer holiday bookings and that it would reduce its Euro Disneyland programme.

Euro Disney, owner of the theme park, continued to fall from grace with a 25p drop to 940p.

Forte hit a fresh low for this year, slipping 6p to 144p.

Kwik-Fit also lost more favour, giving up a further 14p to 111p in the wake of Tuesday's profits warning. One large broking house was rumoured to be advising clients to avoid the stock, even after yesterday's decline.

NSM, the heavily debted open-cast coal mining company, continued to sink, and hit another low for 1992 with a 2p decrease to 29p.

Dumas Group, the food supplier, added its name to the growing ranks of suspended shares, calling a halt at 8p pending a refinancing.

The FT-SE index of the UK's 100 leading companies rallied further yesterday, climbing by 49.8 points to 2,423.2. A 29.5 point advance to 1,815.1 was recorded by the narrower FT 30 share index. Trading volumes were better. Gilt-edged stocks firmed by around pounds 1 16 at the longer end

Rank Organisation has appointed Sir Leslie Fletcher as chairman to replace Sir Patrick Meaney, who died this month. Sir Leslie has been a non-executive director of Rank since 1984, and is also chairman of Westland Group and deputy chairman of RMC Group. Rank advanced 29p to 577p, with slightly more than 1 million shares traded. Obituary, page 28

Shares in Powerscreen, maker of screening and crushing equipment for the building industry, were unsettled by an incorrect report that Robert Fleming no longer had a beneficial interest. In fact Flemings has cut its stake from 3.5 per cent to one that is no longer notifiable. Powerscreen, down to 225p at one stage, found late buying support and closed at 230p, off 6p.