MARKET REPORT: Spend, spend, spend as punters bet on consumer spree

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The Independent Online
As large City institutions continued to squeeze the Woolwich windfall the stock market happily lifted shares of retailers and others set to benefit from the conversion spending spree.

Dixons, the electrical chain that alerted the market to the windfall pickings with its optimistic trading statement on Wednesday, put on a further 17p to 553.5p, a two-day gain of 61p.

Marks & Spencer was also in form, adding 21p to 555.5p and even long- suffering Storehouse, helped by a positive trading, jumped 17p to 205p.

With the Bank of England interest rate increase restrained to 0.25 of a percentage point, blue chips adopted a "candy floss" mentality with Footsie swinging from a near-30 points fall to close up 5.4 points at 4,767.8.

There had been fears in the run up to the BoE announcement that rates would be lifted by a full point. Others were prepared to settle for half a percentage point. So the extent of the increase came as something of a relief.

It encouraged the spend, spend, spend feeling to spread beyond retailers who had hogged the limelight on Wednesday.

Brewers joined in the fun with Bass up 24.5p to 809p and Whitbread 24.5p to 793p. Greenalls, the hotels and pubs chain, rose, with a little help from SBC Warburg, 28p to 452.5p and MFI, the furniture chain that only last week indicated it was not experiencing any windfall boom, put on 3.5p to 127p.

Hopes of a cruise bonanza, as well as talk that Margaret Beckett, President of the Board of Trade, was favourably disposed towards the P&O cross channel ferry merger with Stena, moved the shipping shares 23.5p higher to 636p. Meanwhile Woolwich, up 9p to 304p, said its latest auction had produced an average of only 285p against the 373.5p peak touched on Monday. Sharelink, the big execution-only stockbroker, said Woolwich was its clients' most popular buy, attracting more attention in its first three days than any other share over the week ending yesterday.

Superstores were again in demand. The positive trading statement from J Sainsbury kept the sector on a high. Sainsbury rose 21p to 420.5p with Safeway up 12.5p to 399.5p, Tesco 11.5p to 431p and Asda 2.75p to 142p.

TI, the engineer, added 16.5p to 482.5p as the market swung round to the view it was not a significant casualty of the strong pound and British Land, up 21p at 607.5p led the more bullish property sector.

Drugs had a mixed session with British Biotech illustrating the market's reluctance to take prisoners, plunging 33p to 152.5p following its disappointing progress report after a 15.5p fall on Wednesday.

Medeva, another Wednesday casualty following a "dear doctor" letter, recovered 10p to 258p as HSBC swung from sell to buy; it is the first time the investment house has been positive on the shares for four years. Newcomer Galen, placed at 150p, ended at 182.5p.

Tate & Lyle had to endure the bitter taste of negative sentiment as Credit Lyonnais Laing and Warburg cut their profit expectations. LucasVarity had to contend with a 180p target price from Societe Generale Strauss Turnbull; the shares fell 3.5p to 198p.

British Steel edged ahead 3p to 144.5p after Morgan Stanley was said to be positive, suggesting the year's dividend will be held at 10p even if, as expected, profits fall further.

Rolls-Royce fell 3p to 218p although its foreign share holdings have fallen below the 29.5 per cent ceiling without forced sales being necessary.

The tendency to disclaim knowledge of why a share has fallen has attracted Network Technology. The shares, only down from around 200p, fell a further 5.5p to 183.5p despite the company saying it knew of no reason for the fall. Chemical group Metrotect, which proffered a similar message on Wednesday, rose 1.5p to 31p, reflecting director buying.

Roskel, the building materials group, underlined the neglected value of many second- and third-liners. A 145p offer from SIG, the insulation group, lifted the price 63.5p to 134.5p. Food group Albert Fisher, where a bidder lurks, fell 0.5p to 43.75p as PDFM acquired 250,000 shares at 44p, taking its stake to 12.07 per cent.

Finelist, the car parts distributor, held at 323.5p, down from a 394.5p peak. Stockbroker Redmayne Bentley rates the shares, suggesting profits will jump nearly pounds 10m this year to pounds 18.2m and to around pounds 28m next.

On Ofex, Display IT had another wounding session, falling 70p to 220p.