Market Report: Shares catch on to US party mood

EQUITIES CAPTURED some of America's exuberance. After dismally trailing New York the stock market suddenly came to life with Footsie surging 174.4 points to 5,251.9; only two weeks ago the index was seemingly on its knees, touching a year's low of 4,599.2.

New York has been in rampant form since last week's interest rate cut. The Dow Jones Average has surged more than 8 per cent and was riding at 8,626.02 as London closed.

The upsurge appeared to have a snowball impact with trading gathering strength as the day progressed; turnover once again topped 1 billion shares.

The sheer volatility of blue chips is catching many players on the hop. In part it is due to order-book trading; the higher figures now involved, are of course, another influence.

Suggestions that recession fears had been overdone and more talk that interest rates would come down revitalised many shares hit by worries of a dramatic earnings slowdown. Hays was an example. The distribution and recruitment group led the Footsie charge, gaining 94p to 860p. Normally such a movement would herald a takeover bid or at least widespread speculation that some form of corporate action was in the air.

If Hays was in the takeover frame nobody was pointing the finger. There was not a whiff of corporate activity with the conviction that the shares were oversold cited as the reason for the advance.

Other victims of recessionary talk joined the romp, with the WPP advertising consultancy putting on 27.5p to 300p and Granada 59p to 844p.

Even battered and bruised Bass, down from a 1,175p peak, frothed 57.5p higher to 779.5p. The brewing and hotel group has already rolled out a profits warning; its figures are due in December.

Only six Footsie constituents lost ground. Boots fell 26p to 880p, seemingly responding to CSFB profit downgrades. The investment house lopped 2.5 per cent from this year's estimates to pounds 590m and 1.5 per cent from next to pounds 640m. It held its buy recommendation.

Centrica, off 2.5p to 113.75p was ruffled by fears of a Westminster probe aimed at examining allegations that the gas supplier was abusing its dominant position.

Norwich Union, disappointing new business figures, lost 8p to 420p; Orange, downgraded by CSFB, fell 7.5p to 532.5p.

Other fallers were Southern Electric, being taken over by Scottish Hydro- Electric, down 6p at 607p, and British Aerospace, for no apparent reason, 3p lower at 434p.

Lloyds TSB improved 51p to 778p, drawing strength from the takeover arguments of its chairman Sir Brian Pitman, His comments helped other banks.

Cadbury Schweppes, ahead of today's investment meeting, hardened 54p to 819p.

The buying spree occurred despite more signals of problems at the sharp end of the economy. BICC, the once proud cables and construction group which was around 460p five years ago, is now in danger of becoming a penny share, slumping 14p to 42p. A profit warning and a round of job losses did the damage.

Retailer Harveys Furnishing declined 45p to 64p on a profits warning, and Slimma, a clothing group, was ripped 9.5p to 16.5p on profits caution and job losses. Paper and packaging group Boxmore International fell 28p to 107.5p following downbeat comments.

The Harveys' downturn, coming close on the heels of the collapse of Essex Furniture, hit retailers, with DFS, figures today, tumbling 24.5p to 172.5p, and Next 6.25p to 455p. Rosebys gave up 12.5p to 116p.

With Footsie now at its best level for more than a month there is a little more activity in mid cap shares and even the neglected small caps. The mid cap index bounced 57 to 4,630.8 and the small cap managed a 14.4 gain to 1,935.7. Government stocks ended half a point down.

Once again takeover action underlined the yawning valuation gaps which have opened up on the under-card. Cirqual, the engineer, jumped 39p to 217.5p as talks got under way, and Gardiner, the security group, put on 3p to 28p after Rexel of France bid 29p cash a share. Brickmaker Ibstock rose 16p to 60p after Austrian group Wiennerberger paid 66p for 29.8 per cent.

Financially challenged Danka Business Systems gained 16.5p to 85p; Goldman Sachs picked up a 3.47 per cent stake.

Newcomer Old Monk, a managed pubs chain, achieved a token premium, trading at 60.5p; Thomas Potts ended at 5p against a 5.75p suspension price. Trading was halted while the company acquired Graycorn, a printer. AromaScan, with what is described as a "electronic nose", put on 1p to 6.75p as its rescue cash raising exercise was approved. Take-up was 57 per cent.

SEAQ VOLUME: 1.2 billion

SEAQ TRADES: 71,538

GILTS INDEX: 110.36 -0.52

DISCONTENT at engineering group Solvera: shareholders with more than 10 per cent of the capital want to put entrepreneur John Munro on the board and replace chairman Richard Duggan.

Mr Munro was managing director of Fairway, a packaging group taken over this year for pounds 28m. When he arrived in 1989 it was worth pounds 2.8m. Solvera, once OMI International, held at 7.5p: five years ago the shares were 60p.

RECRUITMENT group Robert Walters rose 16p to 270p as "put up or shut up" time loomed for rivals PSD.

Walters accepted a US bid worth around 500p a share until the market fall, but the value of the offer is now creeping up as the US company's shares strengthen. PSD acquired a modest Walters stake to keep open its options. If, as is suspected, it had a counter bid in mind, it cannot delay much longer.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system