No pre-election jitters disturb London's swingometer

MARKET REPORT
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The Independent Online
Equities enjoyed a pre-election surge, although tomorrow's poll and the likely Labour triumph made a barely discernible contribution to the enthusiasm.

A rampant Wall Street and the stock market's seemingly insatiable desire for anything financial created much of the excitement.

Footsie jumped 43.5 points to 4,433.2, only 11.1 below the peak hit days before John Major called the election.

As London closed the Dow Jones Average was claiming a 100-plus gain, inspired by economic data which weakened the case for US interest rate increases.

Interest charges, in the present atmosphere, are not featuring on London's swingometer. It is happy to acknowledge New York's influence and looks to the boom in financial shares as the other important development.

With Halifax and the others in the building society pack due to follow Alliance & Leicester to market, this year institutions are desperate for anything with a financial flavour, if only to try and preserve their weightings. Norwich Union's signalled arrival is adding to the financial crush and ensuring insurers are not allowed to miss the party.

Of the 20 top performing blue chips, 14 were money groups. Legal & General was top of the pile, up 22.5p to 431p. National Westminster Bank jumped 32.5p to 751p and Bank of Scotland rose 16p to 376p. The London & Manchester insurance group had the added benefit of Charterhouse Tilney support, moving ahead 5.5p to 416.5p.

The record demand for PEPs and thoughts that the conversion stampede must spark takeover action also inflamed the financial fraternity.

Halifax could pounce on L&G shortly after its flotation; Norwich is seen as being destined for a short market life before it runs into a bid approach.

Glaxo Wellcome was one of the non-financial blue chips to make headway. A Goldman Sachs push, with the US house lifting its target price from 1,210p to 1,290p, prompted a 29.5p gain to 1,188p.

EMI was on song. The showbiz group rose a further 25p to 1,244p ahead of an investment dinner hosted by Henderson Crosthwaite at London's Savoy. A score of fund managers met EMI chief Sir Colin Southgate last night. Such was the level of interest that the dinner was oversubscribed, with Hendersons forced to draw up a reserve list.

Reuters was little changed at 624p ahead of presentations here and New York for its 3,000 system.

Unilever, on the Procter & Gamble presentation, shaded to 1,621.5p and Guinness, with a presentation on its brands due next week, firmed 2.5p to 515p.

Utilities had another strong session, displaying no qualms about a Labour government. Morgan Stanley support pushed National Grid up 3p to 227.5p.

Properties had a good run, with Merrill Lynch offering support. Brixton Estates, Slough Estates and Great Portland made headway. Builders also got the message with Barratt Developments 6.5p higher at 255p.

APV, the engineer that fell on hard times, gained 5p to 71p as a bidder circled and Eurotherm fell 21p to 417.5p; HSBC James Capel was thought to have downgraded.

British Aerospace was lowered 19p to 1,304.5p on sterling worries but British Airways rose 10p to 704p, helped by hopes of an impressive price for its USAir stake.

Mosaic, soon to be Burnden Investments, returned to market following its capture of Bolton Wanderers. Suspended at 53p, the shares touched 77.5p, settling at 62.5p.

Toymaker Hornby, up 8p at 244p, had the unusual distinction of producing a profit upgrade. It said it expected to make pounds 2.5m against market expectations as low as pounds 1.8m. Market forecasts for this year have been lifted to pounds 3.25m. Printer Watmough performed the more traditional role, offering a profit warning; the shares fell 87.5p.

Blacks Leisure, figures next month, jogged 11.5p ahead to 476.5p but the Sears restructuring left the shares unchanged at 77.5p.

Christie's International, where Bahamas-based entrepreneur Joseph Lewis has approaching 30 per cent, gained 10.5p to 299.5p. The auctioneer has been selected to auction works from the Victor and Sally Ganz collection, expected to realise more than $125m.

Cairn Energy's Bangladesh alliance with Shell lifted the shares 8.5p to 594.5p. British Borneo Petroleum Syndicate was unimpressed by director share sales, falling 26.5p to 1,256p. Emerald Energy gained 0.5p to 6.25p and Dragon Oil put on 0.5p to 4p.

Taking Stock

r A big US securities house is planning to barge into AIM. Herzog Heine Deguld expects to start market making in AIM stocks next month; it may later turn its attention to Ofex shares. HHD, with a Tiger trademark, is said to be the biggest player on Nasdaq, handling an average of 80,000 bargains a day. Winterflood Securities, Merrill Lynch and JP Jenkins are currently the main AIM market makers.

r AIM dealings start today in Petra Diamonds with interests in southern Africa. Stockbroker IA Pritchard has placed units of five shares and one warrant at 150p.

r Takeover action is expected at Ex-Lands, the property group which demerged its leisure operations. The shares rose 3.25p to 21.25p, a peak.

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