Market Report: TI Group stages a crucial rally as it struggles to stay in Footsie

TI Group was engaged in a rearguard action to preserve its cherished Footsie membership. The shares rose 27p to 527p, adding a crucial pounds 130,000 to its capitalisation and, just possibly, offering the sort of incentive to help the engineer avoid the dreaded drop.

The Footsie steering committee is due to meet tomorrow to decide the composition of the blue chip index, which has lost some of its reputation for reflecting the state of the upper end of the stock market since the Stock Exchange introduced its controversial, much criticised order driven trading system in October.

Order book trading in Footsie shares has produced an array of silly prices at the close which have, despite their questionable reliability, been blissfully incorporated into Footsie calculations.

TI, a long established Footsie constituent, had seemed impervious to relegation until early in October. Then its shares, riding at an impressive 690p, began to wilt, with Lehman Brothers suggesting they were overvalued.

Misplaced worries about the impact of sterling's strength on group trading also took their toll. The shares fell to 456.5p last month before staging a much needed rally.

RMC, the building materials group, is the other likely casualty. The shares fell 22p to 913p; they have been as high as 1,125p.

British Energy and Mercury Asset Management are expected to be the replacements. For MAM it will, however, be a short-lived return. The shares, which lost their Footsie status in the last review, are strong following the surprise bid from the Merrill Lynch investment house. The agreed takeover is likely to be completed early next year, prompting the elevation of what is at the time the best performing Footsie reserve.

Diageo, the unlikely moniker for the combined Grand Metropolitan/Guinness drinks cocktail, will also create a few problems. Next week Guinness becomes Diageo and GrandMet, in effect, disappears. So the committee could reinstate one of this week's casualties. But it won't. It will again raid the reserves and the then highest placed will become a Footsie constituent. In the meantime GrandMet rose 12.5p to 582p and Guinness 13p to 585p.

As tracker funds which invest in Footsie stocks continued to try and anticipate the committee moves, Footsie had another festive session, gaining 44.5 points to 5,187.4. At one time it was up 80.6.

Christmas has, in effect, come early for the market this year. Normally the festive cheer becomes pronounced in the second half of December. However yesterday's advance lifted this month's already heady upsurge to more than 350.

Financials again led the charge. The huge Swiss banking merger, which is bound to cost up to 3,000 City jobs, inspired money shares, with National Westminster Bank, now the target for all seasons, gaining 58p to 998p. A strike by Barclays, up 27p to 1,573p, is regarded in some quarters as inevitable. Both banks have jettisoned their investment banking operations and, it could be argued, now need each other as never before.

Lloyds TSB, 25.5p firmer at 785.5p, is regarded as the natural predator for Norwich Union, 10p up at 390p. Other financials in the money included Royal Bank of Scotland and Woolwich.

Blue Circle Industries, the cement group, fell 21.5p to 328.5p as Dresdner Kleinwort Benson downgraded, and last week's profit warning lowered BTR a further 3.5p to 179p.

Profit warnings hit publisher Quarto 32p to 69.5p and marketing and plastic group Princedale 4.5p to 18p.

Christies International, the auctioneer, decided to announce the end of takeover talks which the market was unaware had started. The shares rose 1p to 249.5p. Lonrho, up 4p to 93p, confirmed it may bid for JCI, the South African mining group. Telewest Communications gained 6.5p to 79.5p on reports of a US West assault.

First Leisure Corporation hardened 2p to 271p as Charterhouse Tilney drew attention to its takeover vulnerability. "Sooner rather than later the company's future will be resolved and it is still in management's hands to turn fortunes around. End game or a recovery stock? Investors should profit from either," say analysts Andrew Burnett and Melanie Sharp.

Life and Style
Arts and Entertainment
Up my street: The residents of the elegant Moray Place in Edinburgh's Georgian New Town
tvBBC's The Secret History of Our Streets reveals a fascinating window into Britain's past
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
Albus Dumbledore, the headmaster of Hogwarts School of Witchcraft and Wizardry has been the teaching profession's favourite teacher
ebookA unique anthology of reporting and analysis of a crucial period of history
Luis Suarez looks towards the crowd during the 2-1 victory over England
Life and Style
Cheesecake frozen yoghurt by Constance and Mathilde Lorenzi
food + drinkThink outside the cool box for this summer’s frozen treats
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Sir Bradley Wiggins removes his silver medal after the podium ceremony for the men’s 4,000m team pursuit in Glasgow yesterday
Commonwealth games Disappointment for Sir Bradley in team pursuit final as England are forced to settle for silver
Alistair Brownlee (right) celebrates with his gold medal after winning the men’s triathlon alongside brother Jonny (left), who got silver
England's Jodie Stimpson won the women’s triathlon in the morning
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Junior Research Analyst - Recruitment Resourcer

£18000 - £20000 per annum + OTE £25K: SThree: SThree Group has been well estab...

Senior Analyst - Financial Modelling

competitive: Progressive Recruitment: This really is a fantastic chance to joi...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform