'We have had the currency translation gains from sterling's devaluation, and we are now talking about the character of the recovery,' one dealer said.
The shift of attention to the second-liners resulted in the FT- SE 100 index failing to hold early gains, finishing down 4.9 points at 2,754.5. FT-SE 100 volume trading was thin at 176 million shares.
However, the FT-SE 250 advanced by 13.1 points to 2,674.3. Non-Footsie volume amounted to slightly more than 250 million shares - nearly 60 per cent of the day's turnover.
Talk of another big takeover, Friday's advance on Wall Street, and marginally better-than-expected consumer credit figures fuelled the index's bright start to the second leg of the account.
Those gains, though, were eroded by the low volume, and poor performances by a handful of constituents, which included ICI, Wellcome, British Gas and HSBC Holdings.
ICI's shares, up 16p at the outset, closed 11p off at pounds 10.25. The good to come out of presentations on the company's drug pipeline yesterday morning was overturned by a profits downgrading by Hoare Govett.
The broker has cut its profit projections for 1992 from pounds 580m to pounds 540m, and for next year from pounds 720m to pounds 680m. The downgrade reflects poor trading in October in general, and that price cuts by German rivals have bitten into theoretical devaluation gains available to ICI.
Wellcome also suffered, but for different reasons. The shares lost 13p to pounds 10.22 after the company announced a price-cap on Zovirax for patients consuming more than 730 grammes of the drug annually, and who do not have third-party coverage.
British Gas suffered from the Ofgas submission to the MMC, suggesting it should hold, or even cut, what it charges other companies to use its pipelines. Gas, down 6p at one stage, closed down 4p to 274p.
HSBC continued to be chilled by worries over the situation in Hong Kong, and shed 5p to 464p.
Other fallers included Forte, down 1.5p to 167.5p on confirmation that management had bought its Gardner Merchant offshoot. The most notable gainer was Kwik-Save, squeezed 24p higher to 775p by a stock shortage.
Best performances among the second-liners were in building materials, contracting and construction, general engineering, metals, motors, packaging and paper. In building materials, Hepworth, maker of roof tiles, put on 10p to 260p, and Pilkington, the glass company, added 2p to 80p. In motors, Lex Service rose 10p to 263p and Trinity Holdings, which only recently made its market debut, improved 5p to 158p.
Elsewhere, rises and falls were confined to special situations, with the market's gossip tanks running close to empty.
Lucas Industries, though, was subjected to some bid talk, sparked off by weekend press reports that the company had gone on the defensive by hiring Goldman Sachs as advisers. BTR, 1p firmer at 516p, is rumoured to be the predator stalking Lucas, up 4p to to 138p.
On the results front, Scottish & Newcastle cushioned the blow from a drop in profits with a 4.5 per cent dividend increase. The shares climbed 12p to 413p.
Morland was another brewer to shine, rising 20p to 440p amid some buy orders for the tightly held stock. One industry observer said that the recent strength of the stock, which goes ex-dividend next week, could tempt Greene King to offload the share stake built up during its unsuccessful takeover tilt.
Airtours had a roller-coaster session, before closing unchanged at 260p. The price initially rose 10p on the 33 per cent profits improvement, and then sported a 5p deficit as profit-takers moved in.
Disclosure of bid talks pushed Midland Radio up 9p to 114p.
Rugby Group was hit by a James Capel downgrading, down 7p to 208p. Capel's profit projections for 1993 have been cut from pounds 63m to pounds 55m, amid concern about a decline in interest receivable and weaker orders.
Tadpole Technology and Hunters Armley enjoyed lively debuts. Tadpole, placed at 65p by Henry Cooke, sprinted to 85p. Volume was brisk with 4.1 million shares traded.
Hunters, placed at 90p by Panmure Gordon, hit 103p at one time, and closed at 99p. There was talk that it had just secured two magazine printing contracts for Focus and Flutters, a gaming publication.
Leading shares, and gilts, had a dull session as the second leg of the account started. Early gains among the constituents of the FT-SE 100 index were undermined by lack of volume. The index closed 4.9 points lower at 2,754.5, while the narrower FT 30 rose 1.7 to 2,084.1. Gilts shed around pounds 1/4 at the longer end
The Jivraj family has become entangled with the Takeover Panel. It says Jemma Trust, of which a close relative of the family is a beneficiary, has acted in concert with Naaz, a company owned by a trust of which the Jivrajs are beneficiaries. The party owns more than 30 per cent, which, unless reduced, could trigger a mandatory bid for the hotel company. The shares fell 0.5p to 5p.
Cupid, the USM-quoted bridal wear company, had a torrid session, collapsing 32p to 53p. The damage was caused by pounds 168,000 of losses for the half-year to 30 September, a warning about the full year, and a boardroom row that has led to the departure of Michael Murray, chief executive. Just four months ago shareholders cold-shouldered a one-for- two rights issue at 82p a share.Reuse content