Market Report: Rate rise soon forgotten as Footsie powers ahead

AN ARRAY of stockbroker buy recommendations and more takeover activity overwhelmed any lingering blues over Thursday's surprise interest rate increase.

With New York displaying little concern over strong US employment figures, and anxieties about the Far East continuing to fade, the stock market scored gains over a wide front. Footsie put on a determined performance with an 86.5 points gain to 5,947.3. Supporting shares, too, were in form with the mid cap index at a new peak of 5,934.6.

Trading was not particularly brisk. Many investors were content to sit on the sidelines until the impact of the dearer money move becomes clearer.

Boots, up 44.5p to 1,028.5p, responded to a Morgan Stanley 1,100p target price. SG Securities was rather more cautious, shooting for 1,060p.

ABN Amro alighted on food producers, suggesting Northern Foods and recently demerged Express Dairies were attractive ahead of next week's figures. NF rose 6p to 235p and Express 11p to 177p. The investment house also favoured Associated British Foods, up 26.5p to 589.5p. Merrill Lynch sweetened Cadbury Schweppes 31.5p to 981.5p.

The beerage, helped along by the emergence of takeover activity, had its fans. A number of houses, including Panmure Gordon, pushed Greenalls, up 9.5p to 532p; Wolverhampton & Dudley, supported by Schroders, put on 5p at 534.5p and Morland, up 38.5p to 457.5p, reflected Teather & Greenwood interest.

Vaux, which acknowledged a bid approach on Thursday, was unchanged at 345p, Ushers of Trowbridge frothed 25.5p higher to 127.5p after reporting approaches. A venture capitalist-led bid, possibly from Alchemy, is one possibility.

Whitbread, after an investment presentation, rose 36p to 1,025p.

Other shares drawing analytical support included National Grid, 2.5p higher at 291.5p; Lloyds TSB, 21.5p to 895p; and Vodafone, 15.5p to 755,5p. Insurances attracted positive comment and renewed talk of more consolidation; GRE gained 21p at 389p and Royal & Sun Alliance 33p to 674p.

BTP, with links to the Viagra impotence drug, rose 15.5p to 532.5p following BT Alex.Brown buy advice. It expects next week's figures for the year to be some 12 per cent ahead at pounds 54m.

It was not all one-way traffic. The generators were flagged as sells by Merrill. Even so National Power glowed 11p to 586p and PowerGen 9.5p to 782.5p. One worry for the generators is the prospect of tougher Government restrictions, including a ban on new gas-fired plants.

Drugs were high with a bid by Sweden's Astra to buy full control of a joint venture it runs with the American Merck group creating much of the excitement. Glaxo Wellcome hardened 27p to 1,676p and SmithKline Beecham 18.5p to 668.5p.

Thames Water rose 18p to a 1,038p high, following its clearance to supply the garrison town of Tidworth in Wiltshire. It will be the first time a water company has been allowed to handle both sewage and water in a town outside its traditional territory. Tidworth is in Southern Water and Wessex Water country.

SDX Business Systems dampened takeover enthusiasm when it said talks now taking place indicated a bid price of 325p. The shares, 353.5p a month ago, softened 3p to 328.5p. Electronic publisher Forward Technology hardened 0.75p to 13.5p after ending one set of bid talks and starting discussions with another group

Upton & Southern, the small department store chain, duly produced the suspected deal. It is paying pounds 985,000 in cash, loan notes and shares for 50.1 per cent of Garner International, a recently formed Mayfair-based executive search consultancy. The shares rose 0.75p to 3.75p

An upbeat trading statement lifted Aukett Associates, a design practice, 0.75p to 8.5p. Interim profits are up sevenfold at pounds 276,000 and stockbroker Ellis & Partner is looking for a pounds 600,000 year's outcome against pounds 331,000.

BTG continued to benefit from its Torotrak gearbox venture, motoring 19p to 755.5p. Computer group Comino, figures soon, hardened 12p to 269.5p.

Electronics Boutique, the computer games retailer, firmed to 95.5p. ABN conducted institutional crosses at 98.5p. A year ago the shares were 30.25p and have been down to 16.75p.

Barbican Healthcare, a privateer medical group, edged ahead 1p to 95.5p. Stockbroker Killik expects acquisitions and says buy.

Robotic Technology Systems, the Ofex high flyer, rose 3p to 235.5p. Stockbroker JM Finn raised around pounds 2.6m through a share placing at 223p. The cash is earmarked for an acquisition.