Market Report: Defensive mood keeps Footsie on the slide

THE MARKET was pinned on the back foot yesterday, with dealers going on the defensive ahead of today's results from British Petroleum and the fortnightly meeting being held at the Bundesbank.

While few in the market believed that Germany was on the verge of increasing its interest rates, few were prepared to put their necks on the line.

Trading volumes were thin. Just 383 million shares were turned over in a shade more than 16,000 transactions.

The market's leading shares, as measured by the FT-SE 100 index, were in retreat throughout the day.

Besides the lack of general investor confidence equities were also weakened by nerves about the pound, a soft opening on Wall Street and the awaited outcome of BET's pounds 200m rights issue.

Acceptance lists for the cash call closed yesterday and BET, unchanged at the rights price of 110p, should announce details of the take-up today.

Overall, the FT-SE index was unable to hold above 2,400, sliding 14.7 points by the close to 2,392.8. Gilts lost around a quarter of a point.

Banks and construction stocks again featured among the heavy fallers, while oils were unsettled in early dealings by a weaker crude price and speculation about a large dividend cut by BP.

Analysts expect BP's numbers to reflect the effects of a depressed oil price and dismal trading in chemicals and refining as well as the burden of heavy restructuring costs.

BP fell 4.5p to 206.5p in brisk trading which involved 21 million shares.

There is talk that the figures may be accompanied by news of joint ventures in chemicals. It is also being suggested in some corners that the chemicals division will undergo a restructuring, involving heavy job cuts.

Jitters in the sector saw Burmah drop 5p to 527p and Lasmo ease 2p to 138p. Shell, which is also due to report today, hardened by 0.5p to 465p.

In banks, Standard Chartered's disappointing interim results were matched by a 20p hit to 420p on the share price. Barclays, stronger of late, eased 1p to 324p ahead of its interim figures today.

Confirmation of a further fall in house prices from the Halifax Building Society and a negative quarterly review from SG Warburg fell heavily on the builders and related stocks.

Redland, which lost 14p on Tuesday, fell a further 15p to 430p - a low for 1992.

Lows were recorded by several other stocks including Heywood Williams, with a 7p fall to 187p, and Pilkington, off 5p to 87p on talk that the Swiss Bank was revising its forecasts. RMC Group slipped 4p to 475p, just 2p above its low point.

The depressive cloud spread to the property sector, where losses almost extended to double figures in several cases.

British Land gave up 10p to 162p, Frogmore Estates declined by 9p to 245p, Land Securities lost 6p to 367p and MEPC fell 11p to 232p.

Meyer International lost another 3p to a fresh low of 273p, unsettled by its decision to pull its scrip dividend.

Profit-taking overshadowed respectable figures from GKN, resulting in an early advance to the other side of 400p turning into a 12p decrease to 383p at the close. Turnover amounted to 2.2 million.

Shares in the other leading motor component companies followed in GKN's footsteps. Lucas, up 5p at one time, retreated 3p to 107p and T&N gave up a 9p advance to finish unchanged at 143p.

Pensinsular and Oriental Steam was one of 21 Footsie stocks to finish the day on a higher note. The shares climbed 12p to 350p on reports that it was considering replacing the British ensign on its ships with a foreign flag for tax purposes.

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Stories about re-flagging have done the rounds for some time and some obervers yesterday cast doubt on the likelihood of an imminent announcement from P&O.

Moreover, any such exercise will probably only be undertaken by the company's container fleet.

Spring Ram, undermined recently by wild rumours, firmed 2p to 107p.

Euro Disney had a better day, climbing back above 900p with a 33p rise to 928p. Continental buyers were said to be in the market for the stock, which has fallen from grace over recent weeks after disappointing attendance figures at Euro Disneyland.

Compass Group spurted 16p to 425p following an agency cross of 675,000 shares.

Forte was a weak market, losing 7p to 142p. James Capel is understood to have gone negative on the hotels sector.

Many leading shares recorded losses throughout the session. The FT-SE 100-share index failed to hold ground above 2,400, losing 14.7 points to 2,392.8. The narrower FT 30-share index fell below 1,800, dropping 12.5 points to 1,791.5. Trading was thin, with only 383 million shares going through. Gilt-edged stocks lost around pounds 1/4

The motor group T Cowie, which is bidding for the rival Henlys group, has become caught up in another takeover situation. The company owns 4 per cent of Trimoco, which on Tuesday received a takeover offer from Hartwell, owned by the Jameel family. The stake is worth about pounds 1m to Cowie, which held steady yesterday at 127p. Trimoco was unmoved at the 17.5p bid price.

Blacks Leisure, the camping goods and sportswear company, was knocked down 12p to 41p as a line of 100,000 shares was sold at 42p. There is talk that the unknown vendors wanted to offload 500,000 shares. Total volume yesterday was 415,000. Additional rumours that the company might be lining up a dividend cut were discounted by analysts, however.