Market Report: Second division scores new highs

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The Independent Online
SHARES ended the year on a high note with blue chips just below record levels and second-liners stretching to new highs.

The FT-SE 100 index rose 14 points to 2,846.5 on New Year's Eve with drug shares injecting much of the exuberance. It failed to top the peak, established on Tuesday, by 1.4. The index started 1992 at 2,493.1, falling to a year's low of 2,281 in August before starting the advance which took it to a new record.

The long holiday account maintained its reputation for festive cheer with the index climbing 130.3, a slightly slower rate than in the 1991 holiday account.

Second-line shares, although underperforming blue chips on New Year's Eve, have enjoyed an exceptionally strong end to the year, with the FT-SE 250 index hitting a 2,862.9 peak, up 6.5.

Predictably, Thursday's trading was light, with many investment houses operating on a skeleton staff. Seaq put turnover at 228.9 million shares. Enthusiasm in the futures market encouraged much of the cash market action.

Drug shares were inspired by clearances from the US Food and Drug Administration. Amersham International rose 17p to 619p on approval for its Indiclor cancer treatment and Fisons 15p to 245p on the long-awaited acceptance of Tilade, an asthma drug.

SmithKline Beecham rose 12p to 496p on approval for its Paxil depression drug and the retailer Boots improved 12p to 561p as the Manoplax heart drug produced by its drug division cleared the FDA hurdle.

But despite their late rally, drug shares have tended to miss the holiday account party. US investors appeared to turn exceedingly cautious on the industry. However, this week the shares have perked up, with Tuesday's FDA clearance for Glaxo Holdings' anti-migraine drug heralding a modest shift of sentiment.

Supermarket shares remained under the cloud of more intensive price-cutting, although food manufacturers tended to recover some of the ground lost on fears that the retail 'war' will squeeze margins.

Ratners, the struggling jeweller, fell 2.75p to 12.75p. The US investment house Morgan Stanley is unenthusiastic about the shares.

Leisure shares, such as Granada and Thorn EMI, were strong, but breweries were flat. However, the pubs group J D Wetherspoon, floated at 160p a share in October, continued on its merry way, reaching 225p with a 10p gain.

The garage group Pendragon, hived off from the Williams Holdings conglomerate three years ago, spurted 19p to 255p. The Birmingham stockbroker Harris Allday Lea & Brooks has arranged an investment visit to the company later this month and likes the shares.

Ossory Estates, the troubled property group, edged ahead 1.5p to 6.5p. P&O emerged as a 6.43 per cent shareholder as its finance arm declared a 'security interest'.

(Graph omitted)

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