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Market report: Western markets remain resilient to bouts of Asian flu

Once again it was the crash that never was. Although shares fell sharply in early trading, the forecast Hong Kong hurricane failed to ripped through the stock market and with only a little selling Footsie ended just 69.5 points lower at 5,068.8.

For a time it looked as though equities would be hammered. The index fell 150 points and appeared to be in danger of going much lower. But once it became clear New York would not, at least during London hours, suffer another slump, shares picked up.

The market's resilience was, in part, due to the remarkable way it has recovered from previous bouts of Asian flu. With earlier, often frightening, setbacks quickly shrugged off there is a natural hesitancy to sell into a market weakened by overnight developments.

The turmoil in the Far East, which Datastream/ICV calculates has wiped pounds 665bn from the nine main Asian markets since October, has so far had little lasting impact on western markets; London and New York still remain within striking distance of their peaks.

The latest Asian tension occurred as Merrill Lynch's regular fund managers survey showed a preference for European equities. Three out of four believe London shares are fully valued, although 43 per cent are bullish on a year's view.

Nycomed, the Anglo-Norwegian healthcare group, blissfully ignored the gloom with a 65p gain to 2,025p. Domestic stocks such as J Sainsbury and share buy-back candidates like United Utilities and Thames Water were others to push ahead.

Allied Domecq recovered a 17p fall to end 10p higher at 532p as murmurs of some form of corporate activity were heard again.

Another to enjoy a somersault was Dixons, the electrical retailer. Off 27p, largely on worries about tomorrow's trading statement, it closed with a 6p plus to 586p as a more positive attitude became apparent.

Once again groups with Far Eastern connections took some flak although Standard Chartered turned a 56p fall into a 2p gain at 549p. HSBC ended 11p off at 1,368p after falling 79p in the early mayhem. Cable & Wireless confined its decline to 7p at 487p but international trader Inchcape ended at its day's low, off 15.5p to 137,5p, Five years ago the shares were riding at 632p.

British Aerospace, lowered 53p to 1,734p, was hit by talk Far Eastern airline orders may be shelved.

BTR took another pounding, falling 8.5p to 171.5p, lowest for eight years. Tomkins, despite profits ahead of expectations, fell 10p to 300p.

Analyst comments had little impact. Cadbury Schweppes fell 6p to 639p, ignoring Goldman Sachs support. Salomon Smith Barney enthusiasm for generators National Power and PowerGen left the shares off 5p to 639p and 11p at 802p respectively.

But BZW left BSkyB off 12.75p at 432p and ABN Amro Hoare Govett support sweetened sugar group Tate & Lyle, up 18.5p to 535p, an all-time peak. The shares have come up from 400p since August and although prospects have improved there is a sneaking suspicion the group, which once resisted nationalisation attempts by Old Labour, is in a predator's sights.

The usual array of disappointing statements appeared. Servisair, an airline support group, dived 65p to 200p after a profits warning; jeweller Theo Fennell dropped 7p to 25.5p after saying disappointing Christmas trading would hit profits and Pace Micro Technology lost 8p to 37.5p following yet another profits warning.

There were also encouraging statements. Supermarket chain Wm Morrison, IT operator Triad and shipbuilder Cammell Laird were among those to make headway.

B Elliott, the old machine tool group now a specialist engineer, is the latest non-Footsie stock to attract a bidder. The shares jumped 20p to 93.5p after the company confirmed an approach.

EW Fact, the accountancy tuition group, edged ahead 4p to 65.5p. There was vague talk of bid action. BPP, unchanged at 517.5p was one name in the frame.

KS Bioedix firmed 1.5p to 115p. It has developed three antibodies for colon cancer. Details of other projects are thought to be in the pipeline.

Emerald Energy was busily traded. The price firmed 1p to 7.25p in a near 22 million share turnover. The company continues its Colombian oil programme but the depth of the drill means progress is slow. There are hopes of a development report next week.

A pounds 5.2m property disposal hardened Estates & General 4.5p to 80p.