Market Report: Stores lead stampede to yet another peak

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The Independent Online
FOR THE tenth time in what must be the most remarkable Christmas account yet, shares romped to a new peak.

The FT-SE 100 index ended with a 49.7-point gain at 3,462 after touching 3,474.2. The index has soared 227.8 points since the account got under way.

It would be easy to dismiss the latest record-shattering performance as a festive fluke. The stock market is traditionally undermanned at this time of year and is likely to exaggerate buying, or selling, pressure.

Undoubtedly selling has, for the time being, almost dried up. And the dominance of buyers is making life difficult for many market-makers who, desperately short of stock, are pushing prices higher to discourage buyers and, hopefully, pull in the reluctant sellers.

The big talking point yesterday was whether the 3,500- point level would be reached before the account ends tomorrow. Nicholas Knight, the arch-bull of Nomura, the Japanese securities house, was thought to be a few shares short of a portfolio when he predicted a 3,500 close.

But he has seen the index soar more than 600 points this year and had the satisfaction of outperforming his rivals.

The latest upsurge owed much to the ebullient tone of overseas markets during the Christmas break. With festive tips and year-end position- squaring generating early business, the market was clearly in for another record run from the opening bell.

Turnover was poor if judged against a normal trading day. But for a day when the market is expected to merely go through the motions it was quite remarkable, reaching 479.3 million shares with 29,336 bargains.

Stores, inspired by the rash of joyous trading statements, led the stampede. Dixons put on 9p to 285p; Kingfisher 36p to 778p and Marks & Spencer, said to have enjoyed exceptionally strong food sales, 20p to 460p. Next gained 6p to 233p.

Even most of the battered and bruised supermarket groups managed a much- needed recovery.

Kwik Save jumped 26p to 618p, J Sainsbury 17p to 455p and Tesco 8p to 220p.

Asda rose 2.5p to 57.5p. Sara Carter, a Smith New Court analyst, says the group's 'profit progression looks more assured than that of the other majors over the next couple of years as it catches up from a sub-efficient base'.

She regards the shares as a hold, suspecting they may wobble with other supermarkets in the expected round of January price cuts. Profits in the year to April are forecast at pounds 195m, with pounds 230m pencilled in for next year.

Wm Morrison, where there is talk of an Asda takeover bid, gained 7p to 114p.

Food manufacturers also firmed. Berisford International, however, was unchanged at 127p as Associated British Foods rather surprisingly bothered to sell 100,000 shares, reducing its holding to 17.9 per cent. Berisford sold its 23.9 per cent stake in a US insurance group for dollars 10m .

The market was also intent on seeking out what could be the recovery shares of next year. Fisons improved 15p to 128p; McCarthy & Stone, the sheltered homes group, ended 6p higher at 61p.

Fisons was briskly traded with Seaq putting volume at 12 million. Capital, the US group that seeks out recovery shares, has nudged its shareholding higher.

There is a suspicion that Zeneca is contemplating a bid. Such a story is not new. But Fisons' fall from grace could tempt the former Imperial Chemical Industries arm to launch an assault.

It was not all fun and games, with Euro Disney again demonstrating the perils of a leisure roller-coaster. At one time down 43p, the shares closed at 358p, off 15p.

Banking shares were strong with HSBC hitting 946p, up 36p.

Kitty Little, the fragrance and sunglass group, jumped 13p to 56p on hopes that its US link will lift profits and a 2.25p dividend forecast for next year.

Hampden Group, with do- it-yourself stores in Ulster, held at 21p as a line of 100,000 shares went through at 16.5p. Ladbroke Group has a 29.9 per cent.

Coal Investments gained 3.5p to 32.5p in response to the increased 29.9 per cent interest by Stancroft Trust, vehicle of the financier Nicholas Berry. Europe Energy Group, reflecting revamp plans, rose a further 2p to 17.5p.

The FT-SE 100 index climbed 49.7 points to 3,462 while the FT-SE 250 index added 33.8 to 3,807. The account ends tomorrow with settlement on 10 January. In thin trading government stocks scored gains of up to a point.

Baillie Gifford Technology, a venture capital trust with assets of 6.88p a share, jumped 6p to 31p. The former stockbroker Luke Johnson and ex-financial journalist Stephen Hargrave already have effective control and are expected to announce a reverse takeover shortly. A suspension is likely until the deal is clinched.

Persistent interest in Church & Co, the shoe group, has lifted the shares 112p to 415p in six trading days. Interim profits doubled and there are hopes a strong Christmas performance is reinforcing the revival. But sentiment is also helped by talk the Northampton-based group is on a corporate shopping list.