Westminster leaks dampen Footsie's record high

MARKET REPORT

Budget worries, seemingly the result of Westminster "leaks", forced blue chips to back-pedal from their record high with Footsie falling 38 points to 4,745.1.

It was the story that tax relief the institutions enjoy on their dividend payments would be abolished which caused the greatest concern. Suggestions the windfall tax will skim pounds 500m from Railtrack and the National Audit Office was set to discover a black hole in the Government's inherited finances contributed to the sudden erosion of sentiment.

It was very much a market- makers' induced reaction. There was no evidence of heavy selling. Turnover was below average once the near 150 million volume recorded by debutante Norwich Union was stripped out.

At one time Footsie was down 47.6. A mixed New York display and a little late bargain hunting prompted the modest rally.

Said one trader: "It's a pretty miserable day - it's Monday, it's raining and there is no enthusiasm around."

Norwich peaked at 357.5p. It closed at 324.5p, an effective 34.5p gain.

National Westminster Bank, however, usurped Norwich as the financial event of the day. It fell 41.5p to 755p as Martin Owen, chief executive of the bank's City operation, NatWest Markets, quit. Even excluding the pounds 77m one-off hit for interest options mispricing the securities side expects profits to be significantly lower.

The problems at the investment arm prompted NatWest to warn six months' profits would not top pounds 770m, against hopes of up to pounds 900m.

The NatWest setback undermined confidence among the hitherto high-flying banking contingent with Abbey National, the bidder for former discount house Cater Allen, off 27.5p to 868p and Barclays down 36.5p to 1,212.5p.

British Energy also had a sudden departure to contend with - chief executive Robert Hawley. The shares fell 13p to 145.5p although a 9.1p final dividend was stripped from the price.

A few out-of-favour stocks picked a downbeat day to stage modest revivals. Burton and Smith & Nephew, both to be ejected from Footsie, led the leader board and even BTR put on 2.5p to 191.5p.

Shell remained in demand, up 18.5p to 1,277.5p, and RioTinto scored again on the strength of the copper price, up 11.5p to 1,109p.

Utilities had an uncertain time on the looming windfall tax. Railtrack was shunted backwards 30.5p to 624p and Severn Trent lowered 29.5p to 740p.

Psion, the computer group, also produced a profits warning, falling 97.5p to 407.5p. On Friday Logica had a similar experience and lost 95.5p. It declined a further 32.5p to 722.5p.

London Bridge Software put on 12p to 332.5p. The group, specialising in credit management systems, came to market at 200p in March. It said it was hoping to clinch an acquisition which would require a rights issue.

Bluebird Toys fell a further 8.5p to 80p, lowest for three years. A surprise profits warning last month has caused the latest decline. Yet Bluebird looks a sitting duck for takeover action with its pounds 26.3m cash pile almost matching its market capitalisation.

Cable & Wireless Communications firmed to 290p as Salomon Brothers produced a 422p target price, suggesting merger benefits of pounds 200m a year by next year.

Albert Fisher, the food group where a predator hovers, fell 3p to 43.5p with Barclays Global Investors selling 1 million shares at 45p. It now has 2.62 per cent.

T&N, the vehicle components group, was at one time up 28p on takeover speculation. The price closed at 159p, up 21p. Reports of pounds 1bn joint bid from US groups Dana and Federal Mogul created the excitement.

Bakychik, seeking gold in the former Soviet Union, dropped 9.5p to 83.5p, a low. Last year the shares touched 589.5p. In February the gold struggler raised pounds 7.1m through a placing at 200p. It is known to need more cash to bring its mines into production.

Norwich was not the only newcomer.

On Ofex little Internet Music Shop was launched at 50p. Its offer was 3.5 times oversubscribed. The shares closed at 55p.

Fairbriar, the house builder, rose 5p to 37p after producing profits of pounds 3.3m against a pounds 545,000 loss. The company, where the Bank of Scotland sits on 47.3 per cent, was rescued from the corporate graveyard five years ago.

Dean Corporation added 1.5p to 14.5p after announcing orders totalling pounds 7.2m.

Taking Stock

The controversial management takeover of Colleagues, the junk mail specialist, is thought to be near to being announced. The shares have edged ahead to 70p as the deal's finishing touches are put together.

Many in the City think chairman James Robson and his team should pay at least 115p a share - the price at which the company was floated at two years ago.

The shares have been as high as 265p but came crashing down following trading problems. A US fund is thought to be supporting the Robson deal.

Waste Recycling, the David Williams vehicle which came to market at 50p three years ago, shaded to 297.5p, just below its peak.

There is talk it will soon attract a bid, possibly from a water company.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
film
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
news
PROMOTED VIDEO
News
i100
Sport
Robin van Persie scores the third for Manchester United with a perfectly-guided header
footballLive! Chelsea vs West Ham kicked off 10 Boxing Day matches, with Arsenal vs QPR closing the action
Arts and Entertainment
Amy Adams and Christoph Waltz in Tim Burton's Big Eyes
film reviewThis is Tim Burton’s most intimate and subtle film for a decade
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
i100
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
Sport
football
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all