At one time the FT-SE index, measuring the top 100 shares, was at a record 2,869.3 points, up 7.8. Then the cash call rumours gripped the stock market. The index fell 31.4 before closing down 27.9 at 2,833.6.
British Petroleum, which has denied any rights intentions, was the main casualty. Its shares touched 235p, closing at 236.5p, a 9.5p fall. Unilever, which denied the rights rumour, fell 24p to 1,093p. Allied-Lyons, the food and drink group, also branded with the cash call story, fell 17p to 628p.
Blue chips were also ruffled by suspected US selling and some internationals appeared to be unsettled by sterling's strength against the US dollar.
But second-liners, as well as the third and fourth division stocks, blissfully ignored the problems of their bigger brethren. The FT-SE 250 index, covering the shares below the top 100, climbed 13.8 to 2,910.2.
Trading was again busy, although non-Footsie shares attracted the most attention. There are signs that the pounds 2.2bn raised by the Wellcome drugs group during the summer is being pumped into the market at an increasing rate. Shares have risen significantly since the Wellcome share sale and managers of the funds must have grown more and more anxious to invest their slice of the cash.
Oddly, Wellcome was one of the blue chips to avoid a minus sign. Although ending below their best, the shares managed to cling to a 3p gain at 982p. But Glaxo Holdings collapsed 35p to 764p and SmithKline Beecham 19p to 487p.
Retailers had a mixed time. Marks & Spencer, following its positive Christmas statement and bullish noises from Cazenove, the stockbroker, ended 8p higher at 333p.
Burton, ahead of expected redundancy news, hardened 4.5p to 78.5p. Dixons advanced 10p to 274p.
Next, despite a profits upgrade from pounds 28m to pounds 31m by Barclays de Zoete Wedd, finished unchanged at 146.5p.
Supermarkets continued to attract attention, with BZW lifting its J Sainsbury profit estimates. The securities house is looking for pounds 740m, up pounds 5m, for this year and pounds 850m, an advance of pounds 15m, for next. The shares gained 3p to 577p.
Wm Morrison, the supermarket group, eased to 161p as SG Warburg comfortably placed a parcel of shares. European takeover hopes lifted Budgens 3p to 47p, a two-day gain of 8p. Brierley Investments has a 27 per cent interest.
Imperial Chemical Industries, still seemingly en route to demerge its drugs division, put on 15p at 1,085p as NatWest Securities suffered an early reverse in a tug-of-war with BZW and James Capel.
NatWest lowered its profit forecast for last year from pounds 570m to pounds 525m and this year from pounds 760m to pounds 600m.
But BZW, looking for pounds 560m and pounds 750m, said buy for recovery and Capel turned its recommendation to buy.
The Guinness drinks group had a bumpy session, falling 20p to 492p. The market was unhappy about the impact the French bank rate increase would have on its LVMH luxury goods associate, already trading below earlier expectations.
HSBC, the banking group, was firm, up 6.5p at 507.5p, reflecting the recovery in the Hong Kong share market.
Owners Abroad was again actively traded. After touching 110p the shares closed 1.5p higher at 109p as speculators continued to anticipate takeover action before Friday's shareholders meeting to approve the deal with LTU, the German group.
ML Laboratories advanced 55p to a 1,160p peak after Department of Health approval for its Dextrin 20 kidney dialysis treatment. The shares were 679p last year.
Action among the small fry was sometimes fast and furious. A raft of tiddlers scored big percentage gains as speculators sought out hoped-for recovery opportunities.
Cullens Stores added 2.5p to 11p; Regalian Properties improved 1.75p to 13.25p. Hawtin, following its fitness equipment disposal, rose 1.5p to 13.5p.
Air London, the air broker, continued to draw strength from the departure of a persistent seller and holiday industry prospects, gaining 11p to 76p. The shares have risen 22p in two days.
International Media Communications improved 0.5p to 5.75p.
Shares were in two minds, with blue chips retreating and the rest continuing to advance. The FT-SE 100 index ended 27.9 points down at 2,833.6 but the FT-SE 250 index was up 13.8 at 2,910.2. In busy trading turnover reached 769.1 million shares with 35,436 bargains recorded. Government stocks were firm
Celestion, run by the ex-corporate finance man Charles Ryder, is thought to be trading well, enjoying its links with Marks & Spencer and scoring from the lower pound. In 1991 it suffered losses of more than pounds 1m but a swing into profits of about pounds 1m is expected for last year. This year it should benefit from concentrating on clothing and hit pounds 2.5m. The shares rose 1p to 92p.
Shares of the Allied Colloids chemical group are overvalued, Hoare Govett believes. They closed unchanged yesterday at 241p, a shade below their peak. Analyst Martin Evans says the impact of higher insurance costs and unfavourable currency cover is likely to restrain results and profits should now be taken. He looks for year's profits of pounds 45m, up from pounds 42.1m.Reuse content