Market Report: Institutional tinkering keeps market festive

THE STOCK market continued its merry Christmas romp yesterday with the FT-SE index of 100 blue chips topping 2,800 points for the first time.

Trading was again busy with institutions tinkering with their portfolios and many private investors mesmerised by the already daunting list of share tips for 1993.

The FT-SE 100 index ended 18 points higher at a peak of 2,807.7. The FT-SE 250 index, measuring the next 250 shares, jumped 33.8 points to 2,817.4. The FT-SE 350 index, combining the two, reached a high of 1,369, up 10.3.

At the start of the year the FT- SE 100 was 2,493.1. Its previous high was 2,792, reached at the end of last month.

The 100 index has climbed 91.5 points since the traditionally strong Christmas account started six trading days ago. As the market has continued to strengthen, some institutions, no doubt worried about the danger of missing the party, have been detected picking up stock.

But the temptation to adjust portfolios, often taking profits out of FT-SE 100 shares and investing in second-liners, has probably been the main factor behind the high level of trading that has, so far, been a feature of the account.

The suspicion that interest rates will fall again early in the new year also helped the advance. The German share market moved sharply ahead on the feeling that the Bundesbank will at last lower its rates at its first 1993 meeting. In Paris shares also got the scent of cheaper money. The London market, therefore, decided to ignore a rather sluggish New York performance and draw its inspiration from the Continent.

Insurance shares had a strong session, expressing relief over the Government's decision to become a reinsurer of last resort for terrorist attacks against mainland non-domestic property. Commercial Union led the way with an 11p gain to 619p.

Hotels also came to life on hopes that the dramatic downturn in trading is at last showing signs of ending. Forte put on 8p to 180p and Queens Moat Houses, still reflecting the Paribas Capital Markets optimism, improved 4p to 42p.

The Savoy Hotel had another attack of takeover excitement with the low-voting 'A' shares, a narrow market, jumping 73p to 633p. The more important high- voting 'B' shares, relegated to the alternative trading service known as Seats, hovered around pounds 45.

Argyll Group, the Safeway supermarket chain, continued to reflect last week's investment meeting in Glasgow, hosted by the stockbroker Panmure Gordon. The shares gained 14.5p to 424p. They have climbed 38p since the account started.

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Glaxo Holdings missed the fun, retreating 5p to 779p. Once again the shares were overshadowed by fears of reduced government health spending here and in the US.

But Medeva continued to attract support, improving 3p to 217p, and SmithKline Beecham recovered 12.5p to 514p.

Suggestions of a late Christmas shopping spree helped some stores higher. Dixons, for example, put on 7p to 273p. But Pentos, on reports of poor trading, fell 3.5p to 62p, a year's low. The shares touched 143p earlier this year.

Most water shares were hesitant, uneasy about talk that VAT could be introducd.

The Lasmo disposals, read as indicating that the dividend will be held, lifted the shares 9p to 151p. Other oils were firm.

Bunzl, the packaging group, rose 6p to 122p as SG Warburg made bullish noises. Hall Engineering rose 13p to 118p on the strength of a Kleinwort Benson profit upgradng.

Tarmac, last week's strong takeover favourite, slipped 3p to 113p as Barclays de Zoete Wedd reduced its trading estimates.

Brake Brothers, the food group, edged ahead 2p to 388p. It has raised pounds 8.7m for expansion through a share placing at 380p by UBS Phillips & Drew.

Courtaulds, the chemical group, advanced 10p to 589p as some took the view it would follow its spin-off, Courtaulds Textiles, and do a deal with its pension fund.

CT, up 10p to 554p, is collecting a pounds 19m payment from its pension fund.

Lonrho edged forward 4p to 75p. The nil-paid rights, with probably 3.5 million traded, stuck at 0.5p. Genting, the Malaysian gaming group which has 7.3 per cent of Lonrho, was rumoured to be in the market.

Shandwick, the public relations group, improved 1.5p to 9.5p. It has extended its banking facilities, currently valued at pounds 69m, to the end of January 1994. Advertising shares drew comfort from hopes of a recovery in spending.

In busy trading shares reached new highs yesterday. According to Seaq, turnover reached 831.4 million shares, the third day running that 800 million has been topped. Bargains were 30,399. The FT-SE 100 index ended up 18 at 2,807.7. Government stocks were largely neglected

Mallett, the loss-making antique group, jumped 9p to 54p yesterday as Asprey, the upmarket jeweller, picked up a 6.8 per cent stake, seemingly from the Robert Fleming investment group. House of Fraser already has a 29.93 per cent interest. Naim Attallah, Asprey chief executive, said the stake was an investment: 'Who knows what will happen in the future?'

Lingering hopes that MAI, the media and money broking group, would mount a bid for Taylor Nelson were dashed yesterday when MAI cut its stake in the market research group by selling 10.15 million shares. Its interest is now down to 2.98 per cent. The news came after the market closed and Taylor Nelson shares, unchanged at 15.5p, could go lower today.