Market Report: US considerations have an unsettling effect

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The FT-SE 100 index gave up 3.3 points to 3,168.6 and the supporting FT-SE 250 index lost 2.3 to 3,726.4. Turnover was 669.8 million shares, with 27,840 bargains recorded. Government stocks were weak.

GM Firth edged ahead 2p to 24p. The heavily loss-making steel group was in profit in June. Sir Alan Thomas, head of the Government's defence sales organisation, is due to take over as chairman soon. After a dramatic reshaping exercise, Firth consists of a steel rolling mill, steel stockholding yard and and unwanted properties.

Westminster Health Care announces year's results today - pounds 11.4m against pounds 4.3m is expected. The ambitious group came to market in April last year at 260p. It is now 326p. Some wonder whether the profits upsurge will be accompanied by a cash call. There are also worries about the intentions of the 42.16 per cent shareholder National Medical Enterprise, a US group.

AMERICAN influences unsettled shares. The growing conviction that a further transatlantic interest rate increase will be announced soon ruffled sentiment, and the alleged US ambitions of two blue chips helped reinforce the stock market's unease.

But Far Eastern considerations partly redressed the balance. As the market closed, stories circulated that a deal had at last been reached over the building of the new Hong Kong airport, heralding more positive relations with the Chinese authorities.

At one time, the FT-SE 100 index was down 17.2 points. But by the close the fall had been cut to 3.3 at 3,168.6.

Among Hong Kong-related shares to perk up in late trading were HSBC, Cable and Wireless and Trafalgar House.

Reckitt & Colman and Unilever remained under the US whip. Fears they had bid for Kodak's household products division did the damage.

Any takeover is likely to cost dollars 2bn ( pounds 1.3bn), which would require a cash call from Reckitt should it emerge as the successful bidder; Unilever could, however, proceed without tapping its shareholders.

Even so, the Anglo-Dutch detergent and food giant suffered an 18p fall to 1,063p; Reckitt lost 9p to 605p.

Unilever also had to contend with cautious comments from NatWest Securities. Figures are due on Friday. They may, NatWest said, make 'dismal reading'.

The market had opened on a confident note, encouraged by the Barclays interim results. At one stage, Barclays was signalled 30p higher, but the price ended a mere 4p up at 568p.

Commercial Union improved 11p to 563p as the long-awaited cash call finally arrived. But an upbeat General Accident display failed to impress, leaving the shares off 13p at 590p.

WPP, the communications group, soared on the back of the Saatchi & Saatchi results. It is due to report interim results today and after the warm reception given to the Saatchi results there are hopes WPP, where the supporting banks are preparing to sell more than 200 million shares, will produce impressive figures. The shares rose 12p to 123p. Saatchi gave some ground, closing 2p lower at 174p.

MFI, the flatpack furniture group, had an uncertain session despite talk of a push from Morgan Stanley. The shares ended 2p lower at 154p. Upton & Southern was the prime retailing casualty, collapsing 12p to 14p as it disclosed problems at its recent Reject Shop acquisition. Great Southern, the undertaker, gained 46p to 755p. The market awaits the clearance of the latest offer from the US group Service Corporation International.

Charter, the conglomerate, gained 9p to 745p as its chances of obtaining full ownership of Esab, the Swedish welder, faded. It already has acceptances giving it control of the Swedish group. But a strong Esab profits performance has lifted its shares above the Charter bid, prompting Swedish institutions with more than 10 per cent of the capital to say they will reject the bid.

Geoffrey Herbert, Charter's chief executive, has said Charter's only options are to withdraw or accept whatever it obtains.

Courtaulds, the chemical group, fell 11p to 538p as its Austrian rival Lenzing reported difficult trading. But the fall may have been overdone; some believe Courtaulds is creating Lenzing's difficulties.

Eyecare Products, once Kitty Little, traded at 33p against a 41p suspension price. The shares have been in cold storage for four months as the group acquired the upmarket French spectacles maker L'Amy.

Tullow Oil fell a further 2p to 43p on its disappointing Pakistan drilling report; Waverley Mining, with coal interests in Scotland and a spread of developments in Australia and Canada, jumped 6p to 69p.

Rodime, a play on US litigation being successful, rose 3p to 11.5p.

Photo-Me International was seen as one of the beneficiaries of the Government's plan to include the holder's photograph on driving licences, advancing 20p to 255p. The group has in recent years scored from increased demand for photo-identification.

Cluff Resources, the gold group, spurted 5p to 52.5p on an exploration deal with the Tanzanian government but Greenwich Resources stuck at 18.5p as Credit Lyonnais Laing branded the shares a 'speculative buy'. Upside potential, it said, was considerable.

GM Firth edged ahead 2p to 24p. The heavily loss-making steel group was in profit in June. Sir Alan Thomas, head of the Government's defence sales organisation, is due to take over as chairman soon. After a dramatic reshaping exercise, Firth consists of a steel rolling mill, steel stockholding yard and and unwanted properties.

Westminster Health Care announces year's results today - pounds 11.4m against pounds 4.3m is expected. The ambitious group came to market in April last year at 260p. It is now 326p. Some wonder whether the profits upsurge will be accompanied by a cash call. There are also worries about the intentions of the 42.16 per cent shareholder National Medical Enterprise, a US group.

(Graph omitted)

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