LONDON Oil and currency worries

Press, 28 July 1986, Page 32

LONDON Oil and currency worries

PA London Equities ended lower on the second leg of the fortnightly account, in a similar trading pattern to the first

The FTSE 100 share index closed 38.6 down at 1545.8 and the FT 30 share index finshed 31.7 lower at 1263.7 to give falls over the account of 82.6 and 73.6 respectively. The market opened on a weak note with concern over the easier crude oil prices and sterling’s performance spilling over from the previous week together with anxiety over the political problems faced by the Conservative Government, highlighted by the weekend U.K. Press.

Equities shrugged off most of their early pessimism by midweek, taking back some lost ground with the help of gains on Wall Street, on renewed hopes of a cut in the 6 per cent U.S. discount rate, dealers said.

The market then looked to half year figures from ICI to provide the springboard for fresh buying interest However, pretax profits of £472 million, inclined towards the

lower end of expectations, failed to provide the necessary stimulus and prices continued to drift lower until Wall Street again provided some late buying interest Despite the lower over-all trend ICI finished the week 5p higher at 994. ICI said improvements in most of its businesses were offset by declining oil prices and problems in the world agricultural industry which meant first half pretax profits fell to £472 million from £535 million in the same period in 1985. Although the half year figures were lower most analysts see profits recovering in the next two quarters. Among other issues Unilever shed 70p to 1680, Glaxo 8p to 955, GKN 17p to 330, Jaguar 16p to 505 and Thom EMI I2p to 442. Blue Circle ended 38p down at 573 after an analysts meeting while Boots rose 14p to 257 mostly because of bid speculation and Reuters gained 22p to 500 mainly on US support, dealers said.

Some oil stocks showed resistance to the easier crude prices with Shell 2p up at 790. BP closed 13p off at 563.

Standard Oil which is 55.5 per cent owned by BP said its second quarter loss of JUS6BI million announced late in the week contained $1.43 billion of special write-offs, citing expectations of lower future oil prices among the causes. Britoll ended 33p down at 110 after half year pretax profits of £105.1 million versus £364.7 million and said it may fail to make a profit in the second half of 1986 if the oil price stayed at present levels. Brent crude for August delivery was quoted at around $B.BO to $8.90 a barrel at the close.

The weakness of the market mostly eclipsed news of a record 3.2 per cent Increase in UK June retail sales and left the stores sector down on the previous week. GUS ended 50p off at 985 despite better than expected full year pretax profits of £290.35 million against £253.50 million. Dixons closed 6p cheaper at 328 while Marks and Spencer ended a penny lower at 197.

In the bid news BET closed 45p off at 408 after news of a £96 million bid for HAT Group which the company rejected and a £3l million agreed offer for Brengreen 5%p up at 47. BET said it has acquired a 2.3 per cent interest in Brengreen while Hawley Group increased its stake in the company to 18.9 per cent

In easier banks Midland lost 15p to 544, Natwest 5p to 512 while Barclays gained 3p to 522 against the trend. Lloyds finished lOp off at 399 after news of pretax profits for the half year of £335 million in line .with forecasts, against £264 million for the comparative period.

Insurances had falls of around 30p as in Guardian Royal at 882. Commercial Union was 5p lower at 309, among companies to announce interim new life premiums for the first half of 1986 which rose to £38.7 million from £30.4 million in 1985.

In mixed breweries Guinness rose 6p to 313 while Vaux Group lost 7p to 378. Grand Metropolitan finished lip down at 370. Grand Met made an agreed £14.2 million offer for brewers G. Ruddle and Co. Ruddle’s shares ended the week 102 p firmer at 285. Analysts said it is unlikely that the offer

would be referred to the Monopolies Commission.

In a lower engineering sector Dowty Group finished 6p dearer after better than ex-, pected half year pretax profits of £47.6 million against £44.2 million.

Government bonds ended the week little changed, much reflecting sterling’s performance. Gold shares showed mainly modest gains as in Cons Gold 2p higher at 424.

Closing prices in pence last Friday of a selection of shares were:

Ampol, 0.85; Allied 3.25; ANZ, 1.85; BP, 5.63; BHP, 3.32; Bond Corp, 1.26; BAT, 3.93; Brit Telecom, 1.80; War Loan, 38.12; Coles GJ., 1.93; CRA, 2.29; CSR, 1.16; Dalgety, 2.65; Elders IXL, , 2.08; Fletcher Challenge, 1.51; Glaxo, 9.55; ICI (Aust), 1.00; ICI (UK), 9.94; Lloyds Bank, 3.97; Marks and Spencer, 1.96; MIM, 0.64; Nat Aust Bank, 2.06; North BH, 0.75; NZI Corp, 0.73; P and O, 4.83; Plessey, 2.02; Prudential Corp, 8.12; Reed Int, 9.65; Renison, 2.51; Reuter ‘B’, 4.95; RTZ Reg, 5.52 and bear, 5.60; Shell Transport, 7.85; Thorn Ord, 4.42; TKM, 1.52; Trans Dev, 1.82; Unilever, 16.81; West Mining, 1.29; Westpac, 1.80; De Beers (quoted in JUS), 6.00.