MARKET REPORT: Ragged ranks of bears caught out by Mid-East buyer

A Middle Eastern buyer helped wrong-foot the bears. The increasingly ragged army of gloomsters was confident that equities would tumble in the wake of New York's Friday set-back.

But once again Black Monday failed to materialise. An early 64.9-point Footsie fall had become a 19.8 plus by early afternoon although at the close the index was, admittedly a trifle uncertainly, clinging to a mere 0.6 gain.

The appearance of the overseas share shopper was a steadying influence. His orders appeared to be spread between a number of investment houses.

Selling was modest and with the early fall largely the result of market- makers' mark-downs it did not take much buying interest to prevent the sort of fall many pundits so confidently predicted.

There is no doubt many fund managers have got the stock market spectacularly wrong this year. Their growing discomfort is illustrated by the Merrill Lynch fund managers' survey. Once again many of the 68 managers interviewed advocated buying Government stocks and selling equities.

They also declared a tendency to follow the Mercury Asset Management and PDFM route and pile into cash. Many managers said they were adding to their cash balances for the first time since last summer.

On the day the Merrill Lynch survey was published last month the managers contacted offered almost identical downbeat views. Then Footsie stood at 4799.5.

Indeed the blue chip index's dramatic advance from 4,118.5 at the start of the year has been achieved against a persistent bearish chorus from many fund managers and strategists. In January bulls were few and far between with the NatWest Securities team among the most adventurous with a Footsie forecast of 4,600.

Overseas buyers, who look upon London as offering good value as well as stability, have caught many experts on the hop and left them trying to justify what have become increasingly uncomfortably (and unprofitable) positions.

Financials have led this year's Footsie charge, supported by drugs and utilities. The rest of the market has been left out in the cold.

There are increasing signs a subtle shift of emphasis could be under way and the long-neglected second- and third-liners could at last be set to chase after their peers.

After Friday's sharp gain the FTSE 250 index rose another 21.1 to 4,671.6, a peak; the FTSE SmallCap index put on 8.9 to 2,218.71, a long way from its high.

Stories continue to circulate of large investment houses looking more keenly at supporting shares and, in some cases, selling blue chips, to buy them. Fidelity and Standard Life are two institutions said to be taking the view that bargains lurk outside Footsie.

Psion, on reports its new hand-held computer is taking hold, led the FTSE 250 index with a 22.5p gain to 306.5p. Vickers, the defence and Rolls- Royce cars group, was just behind, on the Independent on Sunday report that it is close to selling its medical systems division, clearing the way for a bid from British Aerospace. The shares jumped 14.5p top 213.5p.

Bid hopes also excited Dalgety, the struggling pet food group, and Avis Europe, the car rental group. Dalgety gained 16p to 266.5p and Avis 5p to 152p.

The Avis action was inspired by the agreed US bid for EuroDollar which propelled the shares 69.5p higher to 188p.

Leigh Interests, the waste disposal group up 27.5p to 146.5p, was another caught in the bid frame; it disclosed an approach, but as yet no proposal, from the French-owned General Utilities.

BT was at one time down 23p to 368.5p. The fall was due to dividend payments being stripped out. The group, struggling to come to terms with the shock profit warning from its wannabe partner MCI, has declared a special 35p dividend and is due to pay an 11.95p final. The price ended just 4p lower at 387.5p.

Football shares reflected the ups and downs of the season's kick-off with Burden Leisure, still listed as a packaging and paper company, gaining 5.5p to 40.5p on Bolton Wanderers' victory over Southampton, owned by Southampton Leisure, off 3p at 83p.

The sharp overnight Tokyo fall ruffled shares with Far Eastern links; the Fleming Japan investment trust fell 5.5p to 196p.

British Vita, the chemical group, has made a small bolt-on acquisition, buying Silvergate Plastics of Wrexham. The shares shaded to 231.5p.

Taking Stock

Trocadero, the leisure group under new management, has sold its stake in Copyright Promotions, the Mr Men character merchandising operation.

In March last year it acquired a 22.5 per cent interest. Yesterday its remaining 18 per cent was placed at 80p, producing pounds 1.8m.

Copyright held at 87p and the Troc, where ex-First Leisure Corporation chief executive John Conlan has moved in as chairman, firmed to 24p.

Delyn, the property group facing an unwanted takeover bid, seems to have found an unexpected ally - the Compco property group. It has picked up a 1 per cent shareholding and let it be known it is not in favour of the 110p offer from Newport. Delyn, which has rejected the bid, fell 4.5p to 95p.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
sportSo, how closely were you paying attention during 2014?
Arts and Entertainment
Dennis speaks to his French teacher
tvThe Boy in the Dress, TV review
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
The Plaza Theatre in Atlanta, Georgia was one of the 300 US cinemas screening
filmTim Walker settles down to watch the controversial gross-out satire
Arts and Entertainment
Amy Adams and Christoph Waltz in Tim Burton's Big Eyes
film reviewThis is Tim Burton’s most intimate and subtle film for a decade
Life and Style
Mark's crab tarts are just the right size
food + drinkMark Hix cooks up some snacks that pack a punch
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all