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
ebooks
ebooksAn introduction to the ground rules of British democracy
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: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Day In a Page

Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most
Katy Perry prevented from buying California convent for $14.5m after nuns sell to local businesswoman instead

No grace of God for Katy Perry as sisters act to stop her buying convent

Archdiocese sues nuns who turned down star’s $14.5m because they don’t approve of her
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
Michael Fassbender in 'Macbeth': The Scottish play on film, from Welles to Cheggers

Something wicked?

Films of Macbeth don’t always end well - just ask Orson Welles... and Keith Chegwin
10 best sun creams for body

10 best sun creams for body

Make sure you’re protected from head to toe in the heatwave
Wimbledon 2015: Nick Bollettieri - Milos Raonic has ability to get to the top but he must learn to handle pressure in big games

Nick Bollettieri's Wimbledon files

Milos Raonic has ability to get to the top but he must learn to handle pressure in big games
Women's World Cup 2015: How England's semi-final success could do wonders for both sexes

There is more than a shiny trophy to be won by England’s World Cup women

The success of the decidedly non-famous females wearing the Three Lions could do wonders for a ‘man’s game’ riddled with cynicism and greed
How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map