Market report - Tuesday close

By THIS IS MONEY
Updated:

 

Stock market reaction to the Budget was muted today as dealers showed more interest in moves in US shares.

After a grim morning session dogged by a major sell-off by technology stocks, a powerful start by the Dow Jones industrial average left the FTSE-100 Index closing down only 6.6 points at 6617.9.

At one stage the Footsie was some 81.1 points in negative territory. At the London close the Dow Jones industrial average was powering ahead about 150 points.

While dealers generally welcomed the tight fiscal stance taken by Chancellor of the Exchequer Gordon Brown, there were few Budget surprises to impact on stocks.

Neil MacPherson, group investment strategist at Brewin Dolphin Securities, said: 'The markets are fairly happy the Chancellor has not given away too much or run any risks.'

Sterling dipped slightly as Mr Brown stayed confident of long term low inflation, indicating interest rates would be unlikely to rise much further.

While the Dow rally helped old economy stocks including utilities and engineering stocks, technology companies remained firmly in the doldrums.

Internet stock lastminute.com nosedived way below last week's flotation price for the first time.

Lastminute fell 62 1/2 p to 320p - way down from its 380p issue price and 16% cheaper than at yesterday's close.

The Techmark-100 Index was nearly 292 points off at the close as dynamo stocks like Baltimore Technology (down £13.28 to £90.23), Celltech(down 187p to £12.15) and Freeserve (down 51 1/2 p to 480p) all fell 9% and more.

That triplet was typical of the new constituents who joined the FTSE-100 Index on Monday. Nearly all were vying for the Dog of the Day title.

Marks & Spencer jumped 6% in brisk trade - by 14p to 248 1/4 p - after news an IT exercise involving in-depth analysis and marketing to its customer databases had led to a massive surge in sales at pilot shops.

The 'data mining' technique could bring future sales successes at other stores, analysts hoped.

Investment shell Knutsford, once widely tipped as a takeover predator for M&S, ticked up a penny to 95p. Rumours swirled around dealing rooms that it was now more keen on buying Internet commerce companies than retailers.

Iceland's rebranding plans and 18% profit jump left investors cool. Current like-for-like sales increases showed a slight slowdown on last year and shares chilled 9p to 275 1/2 p.

Strong earnings figures and praise from brokers at Dresdner Kleinwort Benson warmed Glynwed International, maker of the Aga range cooker and recently-restructured engineer Wellington Holdings.Glynwed gained 8 1/4 p to 207 1/4 p and Wellington added a penny to 64 1/2 p.

Biggest Footsie share risers were Amvescap up 67p at 887p, Invensys up 21 1/2 p at 300p, Centrica up 14 3/4 p at 247 1/2 p and Cadbury Schweppes up 25p at 432 1/4 p.

Fallers were Celltech down 187p at £12.15, Baltimore down £13.28 at £90.23, ARM Holdings down 423p at £37.99 and Freeserve down 51 1/2 p at 480p.

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