Market Report: System crash halts trade as share prices retreat

CHAOS and frustration reigned yesterday, with dealing systems thrown into disarray by big problems with computer links to the Stock Exchange Automated Quote System.

Share prices on Seaq became indicative during mid-morning dealings, and market makers were instructed to close all quotations shortly before 1pm. Dealings were halted for an hour.

The problems also caused the Stock Exchange's Topic news service to fail. Expiry of the November Footsie options had to be postponed until the afternoon.

Once normal service resmued, however, investors were left wondering whether the breakdown was such a bad thing after all; share prices tumbled.

The FT-SE 100 share index - around 7 points lower before the shutdown - dropped to 3,104.2, a fall of 21.3, just six minutes after trading resumed at 2pm.

It closed at 3,108, down 17.5 on the day.

Overnight falls on Wall Street, unsettled by fears of higher interest rates, and Tokyo, where the Nikkei 22 slumped 225.46 to an eight-month low of 17,941, cast a shadow over early morning dealings.

Lonrho, though, had a good session. The shares rose 5p to 138.5p on its radical plans to sell more than 700 of its 800 businesses.

British Gas, which announced worse than expected third-quarter losses the day before, waded in amid the dealing chaos with the pounds 615m disposal of its 85 per cent stake in Consumers Gas in Canada. Gas lost 3.5p to 321.5p, and more than 8 million were traded.

Total market volume was reasonable with more than 512 million shares turned over by the close.

Tiphook's announcement that it was negotiating to sell its container division to Transamerica for around pounds 830m, sparked wild gyrations in its share price.

From a depressed 38p, the shares quickly shot up to 83p then almost as swifty fell back to 63p - a 19p rise.

Guinness eased 53p to 446p on a pounds 1bn issue of Euro commercial paper to replace existing short- term borrowings.

A fellow Footsie constituent, ICI, gained 10p to 686p following a meeting with brokers.

SmithKline Beecham, though, was hit by a sell recommendation by Wertheim Schroder, the US broking house, and lost 9p to 402p. Glaxo followed suit with a 8p fall to 643p.

Adverse comment on Thursday's results left Cable and Wireless 9p lower at 462p.

Poor trading statements undermined Ross Group, down 6p at 16p, and Black Arrow, off 8p at 31p.

The shareholder bust-up at Bristol Scotts continued to enliven proceedings. The shares adanced a further 10p to 103p, making a two-day gain of 29p.

Vodafone lost 11p to 524p ahead of interim figures next Tuesday.

Pittencrieff, down 14p to 402p, was subjected to some profit- taking.

Bumper results and two acquisitions lifted Lynx Holdings 8p to 45p. Annual pre-tax profits climbed from pounds 115,000 to pounds 619,000.

Lynx is paying a total pounds 5.2m for Financial Systems, which provides software for banking, trust administration and fund management companies, and Chess Valley Computers, which provides software and systems for the mortgage and secured lending markets.

Subdued debuts were made by Canadian Pizza, which closed at a 1p discount to its flotation price of 200p, and by Gartmore, which finished just 2p above its 168p price tag.

Share prices had a poor session. Leading equities recorded large falls. The FT-SE 100 index fell perilously close to 3,100 with a 17.5 point drop to 3,108. Volume trading was reasonable at 500 million. The account ends 26 November and settlement is on 6 December.

Some bright sparks at Smith New Court have decided to plug into BZW's broking circuit. Alistair Buchanan, number one rated electricity analyst, has departed from Smith along with Tim Anker, his right-hand man on specialist sales, and Daniel Martin. Wilf Wilde will be the stand-alone pylon at Smith's electricity desk until replacements are found.