Market Report: Talk of European forays enlivens D-Day trading

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The Independent Online
TALK of European expansion in such diverse activities as aviation and insurance intrigued the stock market.

British Aerospace was said to be on the verge of buying a minority shareholding in Fokker, the Dutch aircraft group, from the Germans and Commercial Union was once again rumoured to be preparing a bid for Groupe Victoire, the French insurer.

Shares of BAe climbed 16p to 459p and CU put on 16p to 548p.

BAe confirmed it was interested in linking with Fokker as well as other airlines. The Fokker story originated in Germany where it was said BAe had displayed 'great interest' in taking a stake. After the market closed BAe said it had won a dollars 230m ( pounds 157m) Colombian order for eight Avroliners.

The insurance sector has long been prepared for takeover action. But stories of Continental swoops for British firms, which created many flurries, have been replaced by the feeling the strike could be British made.

Victoire has emerged as the favourite target. Its owner, the Suez group, is regarded as a likely seller. Any CU deal would probably require a cash-raising exercise and there are suggestions that it is endeavouring to put together a rights issue.

The rest of the market had an exceedingly quiet session, seemingly surrendering to the D-Day mood. But shares moved ahead. The FT-SE 100 index ended 11.6 points higher at 3,009.4 despite dividend payments stripping eight points from the calculation.

Government stocks were again much more settled and New York's display also helped sentiment.

Talk of hovering lines of stock took their toll. Grand Metropolitan, which held an investment presentation last week, was the subject of a 1.5 million overhang, seemingly largely cleared by the close. The shares fell 6p to 430p.

Kingfisher edged ahead 3p to 519p despite persistent stories that 20 million shares, issued in connection with the acquisition of the French Darty group, could come on offer.

SG Warburg, the securities house, survived a 16p dividend payment to close in effect 5p higher at 707p as Smith New Court suggested the shares were a buy.

NFC and Tarmac moved ahead despite fears that the shares could be removed from the FT-SE index at tomorrow's quarterly meeting. GKN, up 7p at 590p, is expected to return to the exclusive blue chips club but there was some uncertainty whether it would be at the expense of NFC, up 3p at 215p, or Tarmac, up 6p to 154p.

Wellcome, which is losing its finance director, John Precious, edged ahead 4p to 547p. The US Food and Drug Administration is due to consider its Navelbine anti-cancer drug today.

The soap wars took their toll of Unilever, down 22p at 975p. Rival Procter & Gamble claims Unilever's new Persil Power detergent damages fabrics.

London Clubs, offered at a tantalising rating, achieved the hoped-for premium. Sold at 200p, the shares closed at 221p with Seaq putting turnover at 5.4 million.

Euro Disney continued to welcome the arrival of its Arab prince, gaining a further 29p to 415p.

Tullow Oil was again in demand as hopes continued to flow about its operations in Pakistan. The shares, in busy trading, put on 3.5p to 41p.

My Kinda Town held at 13.75p as house broker Credit Lyonnais Laing suggested profits next year would reach pounds 3.1m. For the year ending this month the company, taking in such restaurants as The Chicago Rib Shack, has forecast pounds 1.9m.

Aveso, the broadcast equipment group, rose 2p to 94p. The long-awaited flotation of its Video Logic, producer of a new computer chip, is expected soon.

Bluebird Toys drew strength from the battle for J W Spear, improving 5p to 208p. But Dale Electric, where ambitious TT Group is rumoured to be the hovering predator, lost much of an early gain, ending just 1p harder at 72p.

Life Sciences International improved 9p to 126p. Behind the excitement was a one million share purchase by the chairman, Sir Christopher Bland. The former head of LWT (Holdings), who collected pounds 14m when the group was taken over by Granada, doubled his stake to two million shares (1.15 per cent). Life Sciences was 30p when Sir Christopher became chairman in 1987.

Vanguard Petroleum, an Australian group producing oil in the former Soviet Union, has won the support of the Framlington Russia Fund which, through a placing, has picked up a 3 per cent interest. Framlington paid 90p a share against the ruling price of 74p. Vanguard, producing at its Yuhnove field in Western Siberia, is seeking a London quote.

There are suggestions that Alvis, the military vehicle maker, is near to reducing its controlling stake in Avimo, its quoted Singapore offshoot. The group is likely to use the proceeds to develop Unipower, a vehicle maker taken over in February. The Avimo shareholding is equal to much of the Alvis market capitalisation - pounds 39m with the shares unchanged at 70p.

The account started on a firm note with the FT-SE 100 index up 11.6 points at 3,009.4 and the FT-SE 250 index 14.1 higher at 3,571.4. Turnover was a lowly 436.4 million shares with 22,112 deals. The account ends on 17 June with settlement on 27 June.

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