AFTER five days of heady progress, the stock market paused for breath yesterday. But, in a subdued attempt to reflect the spirit that has driven shares higher in the Christmas trading account, prices finished comfortably above their worst levels of the day.
The FT-SE 100 share index closed 14.6 points lower at 2,827.4 as profit-takers took their toll.
The debate about drug prospects turned towards the bears as the US investment house Smith Barney, which has achieved a high reputation for its pharmaceutical research, made negative noises about Glaxo Holdings and SmithKline Beecham.
Smith, like some other commentators, is worried about a perceived slowdown in drug earnings, partly reflecting government cuts on health spending in this country and the US.
It has, therefore, moved its Glaxo and SKB recommendations from buy to hold. Glaxo shares fell 25p to 756p and SKB 21p to 504p.
Imperial Chemical Industries, planning to hive off its drug interests into a separately quoted company, was also under pressure as Barclays de Zoete Wedd lowered its profit forecasts. It remains, however, ahead of the reduced Smith New Court estimates. The BZW cut is from pounds 600m to pounds 560m and from pounds 770m to pounds 750m. ICI fell 14p to 1,021p.
P&O, down 16p to 500p, was ruffled by a credit rating downgrading and Pearson, unsettled by a hovering line of stock, was lowered 5p to 385p. The property group Hammerson was again in the bid frame with the 'A' shares gaining 12p to 273p.
Kwik-Fit, the tyre and exhaust group, also attracted renewed speculation, gaining 9p to 120p. BM Group, riding at 417p earlier this year, edged ahead 12p to 88p.
There was activity among the smaller fry. A profit warning left Instem, a computer systems group, 20p down at 80p; Wheway, an environmental engineer, more than halved to 6p as it plunged into losses of pounds 3.5m from profits of pounds 2.8m and said the proposed merger with McLeod Russel had been abandoned.
Shandwick, the public relations group, improved 3p to 14p, reflecting its extended banking facilities.
Harmony Leisure, the hard-pressed pubs group, which resisted an attack from 'rebel' shareholders last month, held at 7.5p. It has sold its Old Thameside Inn, near London Bridge, to Allied-Lyons for pounds 1.2m. The sale cuts debts by 30 per cent to pounds 2.8m.
Among oil stocks, Cairn Energy put on 2p to 34p. Societe Generale Strauss Turnbull forecast net income will swing from a pounds 27.6m loss into profits. It suggests pounds 500,000 this year, and pounds 8.3m by 1996. Oliver Resources, suspended at 2.25p, is taking over the Olso-quoted Kirkland oil and gas group in a share deal. A pounds 10m cash raising is planned.
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