Market Report: Shares climb out of the doldrums

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The Independent Online
THE STOCK market spent much of the day in the doldrums, but finished on a strong note.

A dismal showing by the Conservatives in Thurday's elections put the last day of the three-week account under pressure from the start. Investors were also discouraged by uncertainty over the US economic recovery throughout the morning.

Although Wall Street opened in positive territory on mixed US jobs data, investors remained on the sidelines. But the market suddenly turned upbeat during the last half- hour before close. The FT-SE 100 index, helped by bargain hunters and selective futures buying, closed 7.4 ahead at 2,793.7.

With few exciting features to influence share prices, some old bid stories were again doing the rounds. Hepworth, the building materials group, was in demand on hopes of a takeover from the rival MB Caradon.

MB, run by Peter Jansen, is sitting on a pounds 400m cash pile and Hepworth is widely regarded as a prime target. Hepworth shares raced ahead 13p to 373p, although less than 1 million changed hands.

Renewed bid rumours also sent United Biscuits 8p higher to 429p. The company has been the subject of persistent takeover talk for several weeks. Both Cadbury Schweppes, down 10p to 443p, and Hanson are regarded as possible bidders. But Grand Metropolitan, the food and drinks giant, is the latest to be touted as a potential suitor.

Grand Met, 6.5p better at 429.5p, was also recommended by Nomura Research in an investment note sent out to clients yesterday. The broker said worries about the group's debts had been overdone, and it expected the group to raise about pounds 1.5bn from disposals.

Vodafone, the mobile telephone company, continued its strong run thanks to better-than-expected growth in its subscriber base. NatWest Securities says the shares, up 10.5p to 404p, are a buy.

Trading activity in oil stocks was high following better-than-expected first-quarter results from British Petroleum earlier in the week. There was a two-way pull in the company throughout the day, but the bulls emerged with the upper hand. The shares edged ahead 0.5p to 306.5p on 7 million trading volume.

Shell was 4p better at 565p as some analysts advised a switch into the stock from BP. The company is due to report its first-quarter results next week.

Lasmo, however, slipped 3p to 146p on fears that some of its large shareholders were dumping stock. Smith New Court was also thought to be behind the selling.

One of the heaviest fallers was Pittencrieff, the North Sea explorer. The company, whose shares have been a strong performer over the past 12 months, shocked the market with a profits warnings. As a result, the shares crashed 69p to 307p.

Spring Ram, the bathrooms and kitchen sinks manufacturer, added 3p to 85p. The shares have come up from about 58p since the company announced a sharp fall in profits about two months ago. But there has been steady buying in the past few weeks, with 2.8 million changing hands yesterday.

P&O, the shipping group, ebbed 3p to 449p after Lord Sterling, its chairman, made a cautious trading statement and called for another interest rate cut. IMI, the engineer, said the economic upturn was still patchy. The shares lost 10p to 281p.

Ladbroke, the betting and hotels group, rose 2p to 159p despite talk of a shares overhang. Goldman Sachs is believed to be holding on to a large line of stock and there is growing concern that the shares may weaken after an imminent scrip issue.

Among tiddlers, Real Time Control spurted 6p to 77p. There is a rumour that the electronics company may receive an approach from Alphameric, down 1p to 38p.

Northamber, the computer hardware supplier, was again in the limelight, surging ahead 13p to 58p.

Equity prices ended a nervous three-week account in upbeat mood. Late buying helped to overcome a weak start to the day with FT-SE 100 index closing 7.4 points up at 2,793.7. Trading volumes were moderately high at 615 million.

Credit Lyonnais Laing has taken a shine to specialist house builders. In a keynote circular to clients, the broker is recommending Bellway, Berkeley, Bryant, Persimmon, wilson Bowden and Wilson Connelly. Ian Jermin, CLL's smaller companies analyst, says they do not depend on a general market recovery. Market share gains, rising sales volumes and price rises will benefit the bottom line.

Prior, the property company that made a disastrous venture into brassware retailing with the pounds 21m acquisition of Knobs & Knockers in 1989, has been rescued by a placing of shares. Of the pounds 2.3m proceeds, pounds 1.7m will pay off some debt; Prior's bankers will write off the rest. The holding of James Prior, chairman, has been diluted to 35 per cent from 68 per cent. The shares were unchanged at 3.75p.

Shares in Chiltern Radio slumped 10p to 60p. It is believed that Smith New Court, the company's broker, bought a line of 62,000 shares from a forced seller at 50p each. The move prompted a sharp mark- down by other market-makers. The seller is thought to be a troubled Lloyd's of London investor who has been hit by heavy insurance losses. Chiltern's results are due next week.