BP Amoco, with Seaq putting volume at 187.2 million shares and the price rising 21.5p to 924.5p, started trading following the American Federal Trade Commission's approval just before the New Year shut down of BP's merger with the US giant Amoco.
The resultant behemoth has a capitalisation of more than pounds 85bn, leapfrogging Glaxo Wellcome, valued at around pounds 77bn, to become the largest Footsie constituent.
Although the merger won a chorus of support from analysts at many investment houses, there were howls of protest from fund managers caught out by a late, if rather arcane, change after the link was confirmed by the FTC.
On Wednesday, a day ahead of US approval, Footsie International, which regulates London's share indices, announced a formula for calculating the BP Amoco share price once the merger was cleared.
Wisely, FI said that if the indicated price "appears unreliable" it reserved the right to substitute a "more representative" price. This revised price is what caused the dismay.
What was described yesterday as "misinformation" sent Amoco and BP soaring in New York late on Thursday. The confusion was caused by reports that there were 8,000 buyers of Amoco shares; they should, apparently, have said 8,000 sellers.
Under the original formula BP Amoco should have opened in London yesterday at 954p, but the revised price decreed by FI was 911.75p. Such a gap made a considerable difference to the opening index, and hopelessly wrong-footed fund managers who had calculated something near 954p and also lost out on shares they acquired in New York. In the event BP Amoco started trading at around 925p, with Footsie up 26.8 points.
The heavy BP Amoco volume reflected, in part, the confusion over the Footsie formula and the need for tracker funds to increase their weighting in the new giant.
After a volatile session, Footsie ended 3.2 points off at 5.879.4, despite a strong New York display and a recovery by continental markets that had wilted ahead of the euro's arrival. At one time the index was off 71.3; just 30 minutes ahead of the close it was up 34.3 before a late selling rush took its toll.
Telecoms, spurred by encouraging festive season mobile phone sales, were on a wavelength all their own. Orange led the surge, up 13.74 per cent to 794.5p; Vodafone managed a 73p gain to 1,049p, a peak, and Securicor was up 34p to 538p. BT rose 33.5p (after 52.5p) to 939p. Telewest Communications, 12p up at 185.5p, and Colt Telecom, 56.5p up at 953p, also buzzed.
But for retailers it was gloom again as CSFB cut profit forecasts for most of the leaders. Goldsmiths, the jeweller, followed its confirmation of a possible management buyout with a dull trading statement and fell 15p to 154p.
Superstores were disconcerted by signs that a price war could develop, although Asda's price-cutting was dismissed in some quarters as a defensive move and not as the first salvo in a pricing confrontation. Asda rose 2p to 163.25p, but Tesco lost 9.25p to 162p and J Sainsbury 31.25p to 450.25p. Safeway fell 22.75p to 279.25p.
The main euro impact was on Irish banks, now seen as European players; Allied Irish Bank rose 56p to 1,126p.
The long festive holiday and the advent of the euro had encouraged some fund managers to remove possible trades from the computerised order book. On yesterday's form they appeared to be in no hurry to put them back.
Drug shares were on a high, with Glaxo Wellcome 61p stronger at 2,129p on talk of a counterbid for Zeneca, up 77p to 2,694p.
Suggestions that it had clinched a pounds 500m sale of its Cantrell & Cochrane drinks group and made a good profit in the process helped Allied Domecq 11p higher to 565.5p.
Imperial Chemical Industries's failure to sell its Tioxide operations left the indebted group down 29p at 492p.
Mirror Group, the newspaper company, responded to reports of venture capitalist bids and a confirmed TV link with Glasgow Rangers with a 10p gain to 159.5p. LucasVarity hardened 7.25p to 207.75p on bid talk.
Software group Staffware fell 40p to 227.5p after saying that it was unaware of any reason for last week's surge - on Wednesday the price jumped 77.5p. It repeated earlier comments that annual results depended on the timing of sales contracts, "a significant number of which are signed at or around the year end".
Tay Homes held at 107.5p as Sunley Family, an unquoted group, called a meeting to approve board changes. Zaar, up 14p to 70p, fell back to 60.5p after the electronic equipment group produced a shock profits warning.
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