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
Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvDownton Abbey review: It's six months since we last caught up with the Crawley clan
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
premier league
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
ebooksAn unforgettable anthology of contemporary reportage
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
Plenty to ponder: Amir Khan has had repeated problems with US immigration because of his Muslim faith and now American television may shun him
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

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments