Market Report: Vodafone leads the way on American interest

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VODAFONE, the mobile telephone group, nudged its all-time high as the rest of the stock market made a subdued start to the new account.

Record business last month was one factor. Another was the recurring suspicion that, in the present highly charged telecommunications atmosphere, a leading US group will soon strike.

At 578p, up 25p, Vodafone is still cheap on US valuations and US investors have piled into the shares this year. They have more than 30 per cent of the capital.

Last month Vodafone achieved 38,490 connections.

October was expected to produce good figures, with Vodafone responding to the challenge from Mercury's One-2-One launch.

Other telephone shares made more modest headway. BT eliminated an early knee-jerk fall following its weekend price-cutting exercise and ended with a 3.5p gain at 465.5p. The partly-paid improved 1.5p to 214.5p. Cellnet, controlled by BT, should report its October connections this week.

The telecoms revival helped to reduce the fall by the FT-SE 100 index from 23.1 points to 6.6 at 3,164.4. But trading was quiet, inhibited by the Chancellor's caution on interest rate cuts.

Barclays de Zoete Wedd Investment Management, one of Britain's top pension fund managers, also contributed to the weakness with its warning about the 'disastrous' impact of further taxes on pension funds.

For the first time for a long while the account's opening performance was not distorted by any FT-SE constituents going ex-dividend.

Reuters, up 28p to 1,662p, was helped by US buying and Rank Organisation, 6p higher at 847p, responded to positive Henderson Crosthwaite comment following Friday's analysts' meeting. Henderson, drawing attention to higher sugar prices, also helped Tate & Lyle improve 5p to 387p.

Booker, the food group, edged forward 1p to 386p despite negative comments from Societe Generale Strauss Turnbull. Its analyst Carl Short suggests the arrival of Costco, the US warehouse club group, is likely to be more damaging to wholesalers than retailers and could hit Booker's cash-and- carry operations.

He expects Booker to produce profits of pounds 88m this year and almost pounds 100m next. The other leading cash and carry group, Nurdin & Peacock, which has club warehouse ambitions, fell 7p to 182p.

Food retailers, however, remained unsettled and worries that manufacturing margins will suffer in the forthcoming price war ruffled Dalgety, Northern Foods and United Biscuits.

Devro International, a maker of sausage skins, was firm at 244p. NatWest Securities, which handled the summer flotation, has increased its profit forecast. This year's stays at pounds 25.5m but next year's is up from pounds 28.5m to pounds 30m.

Reports that Satellite Information, supplying TV services to betting shops, had declared a pounds 55m special dividend failed to offer much inspiration to shareholders.

Racal Electronics, with almost 20 per cent, rose 4p to 209p but Ladbroke remained weak in the wake of the Queen's Moat Houses debacle, slipping 1p to 172p. Ladbroke has 18 per cent. Others with stakes include Brent Walker, unchanged at 5p, and Bass, up 2p at 490p. Bass is buying a 34 per cent stake in a Czech brewery.

Amber Day, the discount retailer, tumbled 4p to 51p. Poor interim figures are expected to be announced today. There are also worries that it will pile on the agony with a rights issue.

Lloyds Chemists held at 275p. The stockbroker Charles Stanley is looking for profits of pounds 60m this year against pounds 49.7m and regards the shares as a buy. Lloyds yesterday paid pounds 4.64m for a Glasgow pharmaceutical wholesaler.

Profit warnings were again a factor. ASW, a steel stockholder, fell 41p to 147p and Cranswick, a pig breeder, 32p to 159p. British Steel, with nearly 20 per cent of ASW, slipped 3.5p to 126p.

Financials were firm. SG Warburg and ShareLink reached new peaks. Warburg, interim figures next week, rose 6p to 930p and ShareLink, with maiden results due, jumped 21p to a 415p peak.

Pittencrieff was the outstanding player on the oil pitch, surging 31p to 436p. But its progress owed little to its oil interests. The market is fascinated by the performance of its US offshoot, floated at dollars 11 a share, now dollars 38 and, runs the New York rumour, set for a dollars 50 offer. At dollars 38 the US operation has lifted Pittencreiff's assets to 650p a share.

Yorkshire TV was rattled by stories of a revenue shortfall, down 8p at 174p. SelecTV held at 25p. Daily Mail and General Trust picked up another 1.6 million shares, lifting its stake to 12.58 per cent.

Tiphook. the container group, remained under pressure, dipping below 100p but closing 5p down at 105p.

Stanley Leisure rose 20p to 249p on its pounds 6m acquisition and positive trading statement.

Quality Care Homes improved 7p to 280p. The stockbroker Beeson Gregory has increased this year's forecast from pounds 2.8m to pounds 3m and next from pounds 3.6m to pounds 3.7m.

The FT-SE 100 index ended 6.6 points down at 3,164.4 and the

FT-SE 250 index 7.6 at 3,520.5. Turnover was 465.5 million shares with 28,404 deals. The account ends on 12 November, with settlement on 22 November. Government stocks gave ground.

Shares of Comac, a provider of computer consultants, return to market today. They were suspended at 90p while the pounds 21.8m takeover of Computer Search and Selection was completed. Earlier this year Philip Swinstead, founder and former chief executive of SD Scicon, moved in, acquiring a 19.2 per cent stake. SD Scicon was taken over by a US group, EDS.

Old takeover favourite Dinkie Heel, a maker of shoe components, held at 30p. The unquoted Fussells Rubber of Weston-super-Mare has sold 150,000 shares. Hugh Champion, a Fussells director, said: 'The price has doubled since we bought them.' The company retains a 2.86 per cent stake. Headlam, the footwear to flooring group, hovers with just below 5 per cent.