Stationary U.K. Production Causing Market Caution

Press, Volume XCIX, Issue 29353, 4 November 1960, Page 17

Stationary U.K. Production Causing Market Caution

(Special Correspondent .VZJ’jt )

LONDON, November 2. The growing uneasiness over Britain’s economic position has ilea to restrained and irregular business on the stock exchange and the new account has started off very cautiously. Turnover has shown further r:gns of slackening, obviously influenced by the latest Treasury figures which have shown further evidence that industrial output has virtually come to a halt and by the latest warning by the Governor of the Bank of England Mr Cameron Cobbold, about credit restrictions.

While the general tone can be called satisfactory, and there is a certain amount of selective buying. this has been offset to a certain degree by profit taking. Steel shares have moved higher and property issues have been active, but industrial equities as a whoi-> have been mixed with some leading issues losing ground. ‘The Times” financial editor says that foreign and domestic buying of New Zealand and Australian scrips has continued to provide a firm undertone for the Dominion and colonial section. He adds, however, that the deterioration in Britain’s balance of overseas payments position, the slackening of the industrial boom the setback on Wall Street, and the United States recession that caused it have all combined to make investors wary. “Movwn-er company dividend and profit statements, particularly interim statements, are now beginning to reflect the narrowing of profit margins that has occurred in the last six months or so as well as directors’ less optimistic assessment of immediate prospects.” The “Daily Telegraph’s” city

editor says the cautious atmosphere now prevailing in most sections of the equity markets is not likely to be dispelled by the latest figures of industrial production.

"Tbe September estimate confirms that taken as a whole British production has stopped rising. There was no increase in the third quarter over the second quarter and even in the second quarter the' rise over the first was only I per cent.

“The best that can be said is that the falling off in consumer durable industries is being roughly counterbalanced by an expansion on the capital goods side,” he says.