Market Report: Fed rate rise sets scene for lively day of trading

John Shepherd
Tuesday 17 May 1994 23:02

THE stock market was left in limbo yesterday, as dealers awaited the decision on interest rates from the US Federal Reserve.

An after-hours announcement of a half-point rise in US rates set the scene for a lively day when the market opens this morning.

On balance, and with no decision announced, share prices in London yesterday ended the day firmer although much of the 7.9 point gain to 3,123.5 in the FT- SE 100 share index was attributable to a few special situations.

Good results from BOC, for instance, lifted the company's shares 29p to 715p - equal to almost 0.85 of a Footsie point. Some 5 million BOC were traded.

RTZ, another Footsie constituent, continued to benefit from the soaring commodity price for copper. Shares rose 20p to 887p, which was worth 1.32 points.

Copper hit a 14-month high with a gain of dollars 16 in the cash price to dollars 2,216 a tonne. Antofagasta, which has copper mining interests in South America, rose 15p to pounds 16.75p.

Falls among the top 100 companies were largely restricted to a couple of pence.

Reuters, down 7p to 485p, was one of the bigger losers. Damage stemmed from news that the London International Financial Futures and Options Exchange is not participating in Globex, the after-hours futures trading system backed by Reuters.

Overall market trading looked more respectable than Monday's start to another three-week account with almost 640 million shares changing hands, but there were fewer than 23,000 bargains.

The gilts pitch ended the day firmer, with gains to half a point. Sentiment was helped by the Government's detail of next week's auction of stock being in line with expectations.

The Bank of England will auction pounds 2bn of 7 per cent 1997 treasury stock, convertible into 9 per cent 2012 stock at four dates between August 1994 and February 1996.

There was a sprinkling of takeover speculation to keep the gossipers happy. Talk included one of the market's oldest chestnuts - Siebe to bid for APV.

An early 3p mark-up was completely eroded by the close to leave APV at 124p. Trading in APV, though, was above average at 1.2 million. Siebe, which initially lost 3p, finished 1p better at 571p.

Also in gossip corner was another old favourite - British Steel to bid for ASW.

This story, though, kept going for most of the day and ASW registered an 8p rise to 213p, valuing the company at pounds 143m. British Steel, said to be thinking about a 250p a share offer, shed 3p to 142.25p.

Portals, still awaiting for De La Rue to make a move, was subjected to some profit-taking and retreated 15p to 790p. De La Rue eased 1p to 856p.

Among a raft of investment presentations, Rugby Group rose 7p to 142p and Tarmac gained 4p to 161p. Both companies were wooing Scottish institutions.

ICI shares were in demand, and firmed 9p to 832p in the wake of Monday's presentation to analysts and yesterday's results from BOC.

Smith New Court's scribblers were active, taking a liking to Emap, up 18p to 385p, and generating positive thoughts about Ladbroke, 1.5p firmer at 193.5p.

Ladbroke's annual meeting is on Monday, and investors are expecting the company to make a full trading statement containing good news from the racing division.

Worries about the ever- growing size of a pending cash call rocked Eurotunnel. Shares fell 15p to 405p.

Among smaller issues, Alba advanced 5p to 178p on the pounds 3.6m purchase of Goodmans Industries.

There was strong demand for Sanderson Electronics. Shares rose 13p to 350p on the back of a 20 per cent.

A profit warning clipped 3p off Telemetrix to 92p.

Contrasting reactions greeted two newcomers. Capitol, issued at 125p, closed at 133p, while Redrow, floated at 135p, slipped to 118p before finishing at 128p.

A fast buck was made on 1.25 million shares in Plysu, the plastic bottle and houseware maker. UBS was said to have done a bought deal at 200p and rehoused the shares at 205p. The identity of the seller was unknown, although there was some speculation that Richard Gordon, former managing director, may have reduced his holding. Shares eased 2p to 210p.

The runaway share price of Bakyrchik Gold, based in Kazakhstan, was checked yesterday, falling 10p to 315p as a 19.1 per cent stake went through the market. Minproc Holdings, an Australian company, sold 3.01 million shares to help its financial reconstruction. The shares, floated at 120p last August, were placed with new and existing institutional investors.

Shares in Standard Platforms, the computer hardware and software group, collapsed from 36p to 18p when they returned from suspension yesterday. Damage was caused by further losses of pounds 1m for the 18 months to 30 September. Share capital is being reconstructed, involving a pounds 500,000 rights issue and conversion of pounds 300,000 of 11 per cent loan stock held by 3i into ordinary shares.

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