Market report: Kingfisher buoyant as Footsie sinks

KINGFISHER WAS the stock market's monarch yesterday. The retail giant, which counts B&Q, Woolworths and Superdrug among its subjects, fought valiantly against Footsie's three-digit slide and was one of the few stocks still standing at the end of the day.

A note from the broker Charterhouse Tilney, which identified Kingfisher as the pick of an undervalued retail sector, sent the stock on its way. With analysts Mark Charnock and Ian McDonald musing about a "massive upside in B&Q" and saying there was "still upside in Woolworths", the stock could only go up.

The positive mood intensified after talk that chief executive Sir Geoff Mulcahy had told analysts that the venture with the French giant Castorama was on the acquisition trail. Receding fears of a bearish trading statement next week added to the bullish sentiment and an all-time record was in sight.

In the event, Kingfisher closed up 29.5p at 578p, the biggest Footsie riser of the day, but just short of its 582.5p peak.

Other retailers to benefit from Charterhouse's wisdom included Footsie candidate Dixons, up 13p to 737p as the broker highlighted the chance of a share buyback. WH Smith, up 4p to 481p, was also favoured by the broker.

Footsie did not share the retailers' joy. The blue-chip index traded sideways for most of the day before being hit by the chill wind coming from Wall Street. Profit-taking in the US sparked a late sell-off which left Footsie 100.3 worse off at 5743.9.

The smaller indices were more cushioned against the international bearishness. The Mid Cap finished 24.3 lower at 4901.7, while the Small Cap fell 5.9 to 2065.0. The new All-Small index, which brings together the Small Cap and the Fledgling indices, ended its first day down 0.3 at 1172.67.

BT was hit by a rogue trade. The telecom group was down 47.5p to 8309.5p - Footsie's worst performer - after a few shares changed hands at 830.5p one minute before the close. Until then the shares had been coasting along at around 837p.

Royal Bank of Scotland, down 5 per cent to 913p, was BT's rival for the wooden spoon, as the market fretted over the size of the bad debts to be unveiled with Thursday's results.

United News and Media shed 26.5p to 585.5p after losing another senior executive. Roger Laughton, the head of its broadcasting unit is to retire at Easter next year.

Different picture at Carlton. The ITV company, results today, tuned in with a 4.5 per cent rise to 487p amid talk that it is to buy PolyGram's film library and an ABN Amro buy note.

Bid talk did the business for FKI too. The engineer was hoisted over 8 per cent to 146.5p on whispers that a US predator has eyed its software business. Broker Panmure also gave the stock a friendly push.

AEA Technology, up 22.5p to 800p was not far off. The business services group was helped by better-than-expected results and good prospects for its nuclear clean-up operations.

Emerson, the US giant stalking the electronic minnow Astec with a pounds 265m bid, took a giant step towards victory. The Americans bought 27 per cent of Astec in the market at the 85p bid price. They now own over 78 per cent of their prey. A batch of shareholders including Royal & SunAlliance and Capital, were said to be among the sellers. Astec finished up 0.5p at 84.5p on massive volume of 85.2 million shares.

Creos International, a small producer of generators for medical imaging companies, plunged 44 per cent to 4.75p - the worst fall in the whole market - after announcing the disposal of its US operations to avoid running out of cash.

These days profit warnings come in family packs. Yesterday it was "buy one, get five free" day. Elementis, the former Harrisons & Crosfield, was the more eye-catching. The chemicals group shed 22 per cent to close at a five-year low of 75p after warning of a slump in sales in its core businesses. Elementis's poor chemistry dragged down fellow chemical groups. Albright & Wilson, down 4.2 per cent to 80p, Yule Catto, 13p lower at 264.5p, and Croda International, down 9.5p to 245.5p, were all tarred with the same brush.

Rugby was also in a scrum. The building materials group cautioned about its joinery business and fell over 7 per cent to 81.5p. The other profit warnings came from the minnows.

Critchley Group, an electrocomponents maker, shed 115p to 455p after blaming market conditions for an interim plunge. Recycling Services, a waste business, threw away 19 per cent to 20.5 after a profit slide. UNO, the furniture maker, was sitting uncomfortably after a bearish trading update sent the shares down 15 per cent to 46p.

Nord Anglia, a provider of educational services, made it six with a warning that its language division has been hit by sterling's strength. It lost 29.5p to 164.5p. CONNAUGHT, a West-Country-based facilities management group, began its stock market adventure with a 15.5p gain to 140.5p. The company, traded on AIM, specialises in the maintenance of council houses and schools. Yesterday it raised over pounds 3m throug h a placing of 2.5 million shares. The money will be used to fund bolt-on acquisitions in the fast-growing cleaning and maintenance sector and to expand across the country.

RUMOURS of bid activity at United Carriers, up 2p to 16p. The parcels group is said to have received an approach of pounds 5m-pounds 10m from GE Capital, the financial services arm of General Electric of the US. However, United's board is thought tobe h ostile to the bid. The company was at the centre of takeover speculation in February when it announced merger talks with a mystery partner. The negotiations were called off in April.

SEAQ VOLUME: 936.7 million

SEAQ TRADES: 68,398

GILT INDEX: n/a