LONDON Dip after still more highs

Press, 23 February 1987, Page 25

LONDON Dip after still more highs

NZPA-Reuter London Shares on London’s stock exchange put in another spectacular performance last week despite a surge of profittaking on Thursday. Shares hit new highs on hopes for an early cut in British interest rates, optimism about a coming Budget after encouraging economic news, and in sympathy with a booming Wall Street.

The dip occurred after a mid-week hesitation in the Wall Street rally prompted many operators to take profits. Lower - than - expected figures on Government borrowing fuelled the belief that it would have room to cut and reform taxes in its Budget on March 17, raising hopes of higher consumer spending.

Markets also believed that a fall of half a point in 11 per cent bank base interest rates could be in prospect.

The Financial TimesStock Exchange index of 100 leading shares was 26.5 points up at 1956.6 at 3.30 p.m. on Friday after touching an all time high of 1977.4 on Wednesday. The index has put on more than 277 points this year.

Despite the mid-week sell-off, most dealers said they expected the bull market to continue and expected that the FTSE index would pass 2000 before the Budget. But they said there could be a big sell-off after the Budget. In what is expected to be an election year, various opinion polls favour the ruling Conservatives and that helped share

prices, although dealers said a victory for the Prime Minister, Mrs Thatcher, had largely been discounted. In the week’s trading, pharmaceutical and chemical stocks were in favour, helped by Japanese and American demand, with Glaxo outstanding with a gain of 205 pence to 1538. wencome added 45p to 419 while market leader ICI jumped 72p to 1409. The newly-floated British Airways met some small investor profit-tak-ing and ended the week just a penny higher at 109. The Rover Group, which is 99 per cent owned, was suspended at 62p ahead of an announcement that Rover and the Dutch firm, DAF BV, had proposed that Leyland Trucks, DAF Trucks, and Freight Rover combine to form a new Anglo-Dutch joint venture. The shares returned from suspension and ended the week at 68p. Prices of a selection of stocks at the close of trading on the London Stock Exchange on Friday were, in pounds: Ampol 1.26, Allied Lyons 3.81, ANZ Bank 2.46, B.P. 7.50, BHP 4.51, Bond 1.19, Brierleys 1.55, BAT 5.45, Telecom 2.34, War Loan 37%, Charterhall 0.39, Coles Myer 2.63, CRA 3.10, CSR 1.66, Dalgety 3.30, Elders 2.17, Fletcher 1.80, Glaxo 15.30, Hanson Trust 1.66, ICI (Aust) 1.49, ICI (UK) 14.00, Lloyds Bank 5.02, Marks Sp 2.11, MIM 1.08, Nat Aust Bank 2.33, Nth BH 1.11, NZI 0.76, P and O 6.22, Plessey 2.22, Prudential 9.30, Reed 4.32, Renison 5.44, Reuter B 6.78, RTZ Reg 7.58, RTZ Bear 7.59,. Shell Tr 10.53, Thorn Ord. 5.73, TKM 1.57, Transport Devel 2.30, Unilever 24.40, Western Mining 2.50, Westpac -2.03, De Beers $U59.47.