Witching hour passes quietly as shares slip

Market Report

THE FEARED double witching was completed without even a hint of excitement.

During the often-frantic 20 minutes when there can be a scramble to influence the Footsie calculation as futures and options expire, trading was described as "quiet and orderly".

It was all a sharp contrast to the March double witching when Footsie swung violently as expiry pressure and the vagaries of the order-driven trading system created 20 minutes of chaos.

The Stock Exchange was so apprehensive this time that it took the unusual step of contacting firms to underline the dangers of volatile trading and the need to take care when dealing for clients.

Footsie, however, had a poor session as fears of higher interest rates eroded confidence. The index ended 64 points off at 5,748.1. Earlier it managed a 19.2-point gain.

Supporting indices were again in the dumps with the mid cap down 60.7 at 5,598.5. This sector has had a calamitous time since peaking at 5,966.6 last week, falling for eight consecutive days.

Compass, the contract caterer, was the best performing blue chip, up 27p to a 643p peak as take-over rumours again circulated.

Superstores were inspired by evidence of strong food sales in the weekly John Lewis Partnership survey. J Sainsbury produced an 8.5p gain to 520p and Asda (figures next week) firmed 3p to 195p.

Drugs shook off the gloom, strengthening as the Swedish Astra group completed its signalled deal with Merck of the US. The new Astra/Merck line-up is expected to herald another round of consolidation in the pharmaceutical industry. Glaxo Wellcome added 13p 1,782p and SmithKline Beecham 4p to 735p. But Zeneca, thought to be Astra's favoured partner, failed to build on its Thursday gain, falling 15p to 2,610p. BT Alex.Brown unsettled the shares with sell advice.

BT's rumoured tie-up with AT&T dialled the shares 5.5p higher to 700p in busy trading. At one point they hit 720p.

Cable & Wireless, withdrawing its legal action against MCI, once BT's chosen partner, rose 1,5p to 675p. British Petroleum fell 28p to 831p but Lehman Brothers has put an 1,100p price-tag on the shares.

Carpetright, ahead of figures next week, tumbled 24.5p to 316p. There are fears that the carpet chain's impressive profits record has come to an end. BT Alex.Brown is looking for pounds 35m but admits that after the Easter washout this could be pounds 2m too high.

Claremont Garments spent much of the day suspended after tumbling 23.5p to 15p. It said it intends to announce its annual figures "on or before" 26 June - the day before the deadline. Robert H Lowe fell a further 2p to 13.5p. Its profits warning was said to have alerted investors to possible problems at Claremont.

Dalgety, a relic of Empire and once a famed Australian agriculture group before developing into a sprawling food operation, had a sleepy final day on the stock market. On Monday it emerges as a slimmed-down pig genetics business. The shares ended 1p lower at 411p.

London Clubs International, the casino group, spun 9p higher to 150p. The shares have been in decline: a year ago they topped 400p. The new gaming tax has hit the group. Some believe the fall has been overdone and LCI is looking vulnerable.

A newcomer, the New Look fashion chain, touched 182.5p in first time dealings. The shares closed at 169p against the 165p sale price. Matalan, the fashion chain, fell 6p to 302.5p with SG Securities advising to sell.

Weir, the engineer, was hit by BT Alex.Brown's caution, falling 21p to 205.5p. Wolseley, the building materials group falling out of Footsie, lost 20p to 375p: Albert E Sharp is cautious. Advertising group WPP, soon to be a Footsie constituent, gained 22p to 412p.

BTG, the old British Technology Group, firmed to 785p. Its Torotrak gearbox group, being demerged next month, is seen as a possible engineering biotechnology company. BTG shareholders get one Torotrak for every share held. Housebuilders had another poor session: Barratt Developments tumbled 20.5p to 287p and Berkeley 35p to 647.5p.

ARM, the microchip group floated in April, jumped 97.5p to a 962.5p peak and Micro Focus remained depressed by its US acquisition, falling 25p to 427.5p.

THE TWO quoted shares of Young & Co's Brewery rolled to new highs, the "A" gaining 40p to 790p and the non-voters 30p to 652.5p. The ferment stems from moves by financial group Guinness Peat to streamline the family controlled group's old-fashioned share structure.

It has tabled resolutions to be considered at next month's shareholders meeting. GP has 17.7 per cent of the voting "A" shares; another class of voting equity is the unquoted "B" shares through which the company is controlled. GP director Blake Nixon says the "A" shares command a net asset value of 989p. "Few other listed pub groups' shares trade at any discount to net asset value".

SEAQ VOLUME: 925.6m SEAQ TRADES: 75,523

GILT INDEX: n/a