Wall Street drives London to mid-summer madness
Thursday 14 August 1997
Footsie opened 21.8 points down. At times, when Wall Street firmed, it looked intent on staging a strong recovery but towards the close, as the uneven US performance became apparent, fell back, finishing near its lowest of the day, off 72.2 at 5,003.6.
Worries US interest rates will be forced higher and stories a major investment house was calling world markets 10 per cent lower took their toll.
The retreat dragged second liners down, ending a six-day winning run which took the FTSE 250 index to a peak. The tiddlers, however, ignored the bleak atmosphere with the FTSE SmallCap index pushing ahead.
Some market men were critical of the way blue chips meekly followed Wall Street. "It's the usual mid-summer madness. Many top players are on holiday and those left in charge of the shops are nervous of their own shadows," said one trader.
London usually catches a cold when Wall Street sneezes. But, as he pointed out, the overnight 1.3 per cent Dow Jones Average fall was little more than a mild transatlantic sniffle.
RMC was a Footsie casualty. The building materials group crumbled 46p to 1,068p as Panmure Gordon suggested the shares should be much nearer 1,000p. In two days they have fallen 57p. Imperial Chemical Industries, despite the weaker pound, led the blue-chip fallers, off 49p to 1,059.5p. The market seemed ruffled by the latest move in its $4bn euro debt programme, a $1.5bn offering of floating rate notes.
Royal Bank of Scotland's not unexpected pounds 630m building society capture left the shares 13.5p off at 612p. The bank is helping to pay for Birmingham Midshires by placing 33.36 million shares with the Scottish Widows insurance and pension group, raising pounds 200m. The issue lifts Widows' stake to 4.69 per cent. Sun Life and Provincial fell 11.5p to 379p as the takeover prompted the building society to end its agency link with the insurer.
Norwich Union put on 13.5p to 334p, inspired by thoughts of its arrival in Footsie next month; a smattering of takeover talk and an Irish stock market listing, which will offer tax advantages to the group's army of shareholders in the Emerald Isle.
Mercury Assets Management managed to struggle from its day's low as a rumour of a bid from Allianz, the big German insurer, started to go the rounds as the market closed. The price ended 26p down at 1,367.5p.
Leading drug shares remained under the whip of the less than enthusiastic stance adopted by Morgan Stanley but British Biotech, for the second day running, shrugged off the caution, gaining 10.5p to 177.5p.
Storehouse's rehabilitation continued with Goldman Sachs giving the shares an outperform classification. The price ended 2p higher at 221p after touching 226p. Last month the shares were 185.5p.
Cadbury Schweppes, off 6.5p to 610p, had to contend with another sell comment, this time from Societe Generale Strauss Turnbull. De La Rue, the security printer, again felt the impact of the BZW caution, falling 23.5p to 395p.
The ferment died at Allied Domecq. The pubs and spirits group was at one time 15.5 higher in busy trading as the management offered positive trading comments and the market got wind of an investment conference called by Seagram.
The Canadian drinks giant has for long been seen as being interested in Allied, perhaps through a trading pact or even a bid. The Grand Metropolitan, Guinness and LVMH imbroglio has increased the pressure on the two groups. By the close, Allied's gain had evaporated to just 1p at 475.5p as dreams of transatlantic action all but disappeared.
St James Beach Hotels gained 8p to 198p as after months of speculation the takeover bid duly materialised. Property group Burford shaded to 117.5p after selling its 14.6 per cent interest in Grantchester at 135p a share; the retail warehouses developer was little changed at 143.5p.
Publisher Highbury House Communications explained its recent weakness by warning of higher than expected losses. The shares fell a further 1p to 7p.
Electronic Retailing Systems International jumped 47.5p to 390p after linking with Symbol, a similar operation, to provide electronic shelf label systems for retailers.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Germany sees 'visible rise' in support for far-right extremism in response to perceived 'Islamisation' of the West
iJobs Money & Business
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...
£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...