LONDON Index sharply lower

Press, 15 July 1985, Page 32

LONDON Index sharply lower

PA London Shares ended the second week of the account lower on small retail profit-taking and a general lack of support. However, the market attempted a rally in the latter part of the week after the Bank of England cut its short-term money market intervention rates by 0.5 per cent,thereby prompting hopes of an early cut in United Kingdom base rates. Dealers saia that to a large extent prices already reflected such a reduction. Sentiment in the early part of the week was depressed by OPEC’s failure to agree oil quotas and the two point June rise in United Kingdom M 3 money supply. Major exporting companies were adversely affected by the strength of sterling. The FT 30 share index ended 29.7 points lower at 926.0 while the FTSE 100 fell 29.2 points to 1,230.8. United Kingdom Government bonds showed gains ranging to 1.5 points at the longer end helped mainly by the strength of sterling. Among leaders ICI lost 48p to 699, Beecham 20p to 303, BTR 15p to 330, Glaxo 50p to 1200, and Hanson Trust 5p to 184. Oils were depressed by several adverse factors which included OPEC’s failure to agree oil quotas, news that Indonesia is to require foreign oil companies drilling offshore to sell

at least 20 per cent of their equity to local firms, Saudi Arabia’s threat to boost production, and Mexico’s cut in its crude price by up to SUSI.SO a barrel. Shell dipped 28p to 675 and Britoil fell 7p to 208 after interim results. Saxon jumped 45p to 350 after agreed merger terms from Charterhouse Petroleum, which lost 8p to 80. Banks were mixed, with Barclays down 3p at 404 and National Westminster 12p off at 697 but Midland added 3p to 392 and Lloyds firmed 7p to 414. Midland announced it had finalised the acquisition of Aetna Life’s 40 per cent stake in the merchant banker, Samuel Montagu.

In weak insurances Royal fell 14p to 676 and Guardian Royal 15p to 706. Building stocks were helped by hopes that the U.K. Government may be willing to spend more on Britain’s infrastructure. Blue Circle rose 5p to 518 and Tarmac 22p to 320. French Kier rose 5p to 190 on hopes of a bid from Trafalgar House which now holds some 25.1 per cent of Kier’s issued share capital. MEPC ended 14p off at 258 after news it has reached agreement to acquire Olympia and York Developments UK, the holding company of English Property Corporation. Electricals were helped by Plessey’s forecast of a first

quarter profit of around £39 million against £42 million last year. Plessey ended lOp up at 134 and GEC rose 4p to 166. Thorn EMI lost a penny to 319. Exco lost 20p to 187 on news it is to sell its 52 per cent stake in Telerate to net SUS42S million. Granada was 22p down at 148 after interim results.

In stores, Debenhams was 2p off at 387 but Burton added 5p to 470. The Burton bid for Debenhams is to be extended until July 24 on unchanged terms, and is not to be referred to the Monopolies Commission. Among other companies reporting interim results last week Vantona Viyella rose 2p to 356, Rank Organisation added 28p to 353 and Imperial Group eased 20p to 166. Johnson Matthey firmed 14p to 95 after full year results and optimistic comment on continuing progress in the current year. Rothmans lost 24p to 132 after annuals. Golds ended mixed after five quiet sessions with the industrial unrest at some South African mines keeping many market participants on the sidelines. Randfontein added SUSO.7S to 102/2 while Driefontein lost ?0.25 to 24. Among cheaper issues Harties firmed 12 cents to 490. In financials Anglos added 100 c to 15.50, but Cons Gold fell 12p to 497. De Beers was 15 cents up at 545. De Beers Central Selling Organisation reported a fall in first half sales of rough gem and industrial diamonds to SUSB37 million from $945 million last year.