Market report: Tuesday close

By MICKEY CLARK FOR MAILONLINE
Updated:

 

STOCK MARKET bears were feeling the squeeze today as share prices raced ahead and City investors tried to capitalise on every piece of positive news they came across.

Supported by opening gains for the Dow and the Nasdaq, London traded near its best levels of the day. The Dow sported a rise of more than 200 points with the FTSE 100 index up 139.7 at 5803.0.

Marconi helped lead the blue-chips higher as the shares rebounded with a rise of 31p, or 10%, to 341p following its long-awaited trading statement confirming the loss of 3,000 jobs worldwide.

But there was no profit warning and the telecoms equipment maker moved to soothe City fears by indicating operating profits of £800m - in line with brokers' forecasts. Some brokers, however, remain sceptical about the outlook for Marconi and the telecoms sector in general.

The statement provided a much-needed boost for British Telecom, 23p better at 574p. BT has settled a preferred bidder for its vast property portfolio. The sale is expected to raise about £2bn, which will help a little to pay off debts now totalling £30bn. Chairman Sir Iain Vallance has vowed to reduce debt by £10bn by the year-end. Vodafone rose 13 1/2p to 219p and Energis put on 32 1/4p to 287p.

Spirent was up 30p at 335p with broker ABN Amro reckoned to be urging clients to switch into the shares from Marconi. But US securities house Goldman Sachs has downgraded its earnings forecast from 15p to 13.5p a share for the current year and from 18.5p to 16.1p for 2002, although it insists the shares remain inexpensive.

Anglo-Dutch household products group Reckitt Benckiser ended the day down 5p at 943p after being in positive territory all day after Monday's upbeat trading statement. US securities house Lehman Brothers has been supporting the shares with a strong buy recommendation and a 1200p target price.

The profit-takers moved in at Tesco, leaving the shares 10 1/4p lower at 259 1/4p. Morrisons traded down 11 1/2p at 203 1/2p as the supermarkets group became a constituent of the Footsie 100 for the first time.

Alliance & Leicester climbed 38p to 788p as takeover speculation was revived. The former building society is again being linked with National Australia Bank, which boasts a war chest of almost £2bn. A&L is capitalised at £3.7bn and is due tomorrow to go ex its 21p dividend.

It was the first day of dealings on Aim for OMG, a computer software company that makes special effects for the movie industry. The shares were placed at 75 1/2p by broker Teather & Greenwood, raising about £6.5m. They opened at 80 1/2p before touching a peak of 83 1/2p.

Baron touched a new low of 22 1/2p before reducing the deficit to 11p at 29 1/2p. One punter dumped 385,000 shares at 10p during the past few days and another 250,000 have been unloaded at 23p as part of a delayed trade.

Software specialist Cedar rallied 16p to 125p after saying it was in 'sound financial health'.

• Prices and indices in this report are from various sources and calculated at different times and may not always match those listed elsewhere on the site.

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