Market Report: Shares in ragged retreat as US alarm spreads

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FOOTSIE SUFFERED a fall of more than 100 points as investors fretted by about collapsing commodity prices and weak displays by overseas stock markets. By the close the index was nursing a 118.6 decline at 5,541.7; at one time it was off 144.8.

Shares were in ragged retreat from the opening bell. New York's overnight plunge and weakness in Hong Kong and Tokyo sent alarm bells ringing. With institutional investors adopting a cautious stance, the trading traffic was all one way. The week's base rate cut and mega-merger failed to have any lasting influence. With the move to cheaper money unable to curb sterling, exporters found themselves under renewed pressure.

Profit warnings from Merck and then Coco-Cola have done much to unsettle New York, putting a decidedly negative spin on the current reporting period.

There is a growing conviction in some quarters that the traditional Christmas rally is doomed this year even before it can start.

It is suggested many institutional investors will be too preoccupied with the arrival of the euro to pay much attention to such mundane activities as playing the market over the festive season. However, any festive surge is usually achieved in thin trading with private investors, who are unlikely to be bogged down by the euro, playing a leading role.

Paradoxically, on the day Coca-Cola unsettled New York, Cadbury Schweppes led the blue-chip leader board after selling most of its non-US soft drink interests to the American cola giant.

Cadbury jumped to within a proverbial wafer of its peak with a 54.5p surge to 989p. The shares have been firm this week following a bottling deal with PepsiCo. They opened on Monday at 865p.

Tesco was another Footsie constituent to buck the trend, firming 1p to 165p as analysts picked up positive signals at an eastern European briefing.

Granada, helped by the possibility of a flotation of its jointly owned ONdigital television operation, added 16p to 953p.

Retailers were at the forefront of the retreat. Marks & Spencer found a new year's low, down 26p to 392p. Keith Oates, who lost the furious boardroom succession battle and is leaving the group, sold 100,000 shares at 419p. He still has 217,000.

British Aerospace was lowered 22.5p to 502p and Rolls-Royce 9p to 227p.

Cable & Wireless, off 30p to 695p, was hit by the surprise departure of its US born chief executive, Dick Brown, who has been largely responsible for revitalising and reshaping the telecoms giant. He is moving to a US computer company, Electronic Data Systems.

Halifax, the mortgage bank, hardened 1p to 849.5p as the Birmingham Midshires acquisition was voted through.

Not for the first time on a Friday afternoon, United Biscuits experienced a run, up 15p at 254p. The shares have in the past enjoyed some spectacular surges as takeover rumours have swirled around. Sears, where high street entrepreneur Philip Green hovers, rose 10.5p to 267.5p.

St James's Place, the insurance group which has enjoyed speculative attention, put on 8p to 279p - due to Morgan Stanley interest. The investment house put a 320p target on the shares.

It was not the ideal debut day. Financial Objects, a banking software group, braved the prevailing gloom, closing at 241.5p in busy trading against a 230p placing. At one time the price touched 265p.

IMI, the engineer once part of Imperial Chemical industries, fell 18.5p to 243.5p after the investment house BT Alex.Brown was said to have trimmed its profit expectations to around pounds 150m from pounds 157.3m.

WestLB Panmure, the old Panmure Gordon, supported PowerGen, down 25.5p to 778.5, with a 1,000 target, and Salomon Smith Barney lifted its General Electric Co target from 500p to 550p. The shares firmed 1.5p to 539p.

Supporting shares suffered with their peers, although the small cap index managed to confine its fall to 8.1 points at 2,012.6. The mid cap indicator fell 43.1 to 4,736.9.

Still the under-card bids continued to flow. Hozelock, the garden products group hit by the poor summer weather, spurted 51p to 292.5p as a management buyout was mooted. Two years ago shares of the hosepipe group topped 550p and last summer reached 371p.

Jackson jumped 12p to 79.5p after fellow construction group Peterhouse, down 4.5p at 87p, emerged with a near pounds 19m share exchange offer.

Celsis International, the healthcare group, tumbled 6.5p to 23p after takeover talks, which have dragged on for six months, broke down.

Evans Halshaw, the car dealer, reversed 3p to 221p after it was disclosed that Pendragon was the mystery suitor. Pendragon fell 2p to 152p.

Profit warnings took their toll. Portmeirion Potteries, following Royal Doulton gloom, cracked 15p to 145p after producing another alert, suggesting year's profits will be between pounds 1.5m and pounds 1.8m; the shares once hit 565p. Printing group Fulmer dropped 25.5p to 57p; it said profits will be below expectations.

Seaq volume: 932.6 million

Seaq trades: 69,764

Gilt Index: n/a

AMINEX IS the latest exploration share to suffer acute discomfort. It fell 7.5p to 14p, a far cry from the 87.5p peak hit last year. The group, with World Bank and Russian interests accounting for significant shareholdings, operates in the old USSR, where it has what appeared to be promising oil concessions. It is being hit by the deteriorating economic situation.

FAIRVIEW HOLDINGS, the house-builder demerged from Hillsdown in October, climbed 10.5p to 90.5p in busy trading on continuing speculation that Berkeley will mount a takeover bid. The up-market builder has made no secret of its admiration for Fairview which has had a subdued time since it was split from Hillsdown. The shares opened at 102.5p but had fallen to 76p at one stage.