Market report: Friday close

By SARAH MARKS FOR MAILONLINE
Updated:

 

IT MAY pay lip service to New Labour, but the stock market loves the Tories. John Major's surprise win for the Conservatives in 1992 was greeted euphorically in the City, the FTSE 100 soaring 136.2 points - at that time, the second-biggest one-day rise ever.

In contrast, the 1997 and 2001 Labour victories saw precious little celebration, with post-polling days budging the blue-chips by no more than a few points.

Today the Footsie hovered a few points up for most of the time and it took better-than-expected economic news from the US this afternoon to galvanise the lacklustre session. The index of leading UK shares closed 16.6 points higher at 4918.9, while the Dow Jones was last up 27.94 points at 10,368.32.

Some companies have benefited from Labour policies and will continue to do so in a third term. Housebuilders and commercial developers have boomed under Labour rule despite grumbles about planning permission and red tape.

Land Securities, for example, has seen its shares almost double from a low of 680p in 2000. The property giant was up 3p at 1345p today as it revealed a £517m debt-inclusive deal to buy retail property group Tops Estates, up 66½p at 509p.

The acquisition gives it seven new secondary shopping centres in areas earmarkedfor new-home expansion, an astute move making it one of the biggest players in the market .

Reassuring first-quarter sales from Unilever shored up support for the blue-chips. The consumer products giant jumped 13½p to 529p on the back of an 8% rise in firstquarter operating profits. Investors were said to be switching into Unilever from rival consumer goods group Reckitt Benckiser, down 25p at 1667p.

ELECTION SPECIAL: The financial impact of Labour's victory

Somerfield sprang back into action, up 4½p at 201¾p as United Co-operatives said it was considering making an offer for Britain's fifth-largest supermarkets chain and had already approached the board.

United should not be confused with the Co-operative Group. It is Britain's second-largest cooperative retailer and a bid from the group was dubbed 'ambitious' by analysts today.

Rival Wm Morrison slipped 2½p to 193½p after brokers at Goldman Sachs downgraded the stock to underperform from in-line.

Private-equity firm 3i rose 5½p to 655p after Dresdner Kleinwort Wasserstein repeated its buy rating on the financial group and set a target of 780p. Analysts hinted that a return of capital and a moreaggressive strategy may be announced with results next week.

Fresh fears of a slowdown in consumer spending were sparked by motor dealer Reg Vardy, up 7p at 485p, which warned that the new-car market in Britain remained soft with sales in the peak month of March not even reaching last year's levels. Vardy said in a pre-close trading statement that new car registrations were 14.4% below last year's. While volumes were ahead on a like-for-like basis, margins were down in the three-month period.

Hopes of a counterbid for Bob the Builder maker HIT Entertainment fizzled out as Canada's Lions Gate Entertainment said after looking at the company's books that it would not make an offer.

HIT, which has already accepted a 300p-a-share bid valuing it at £489m from private equity outfit Apax, slipped 10p to 298p. US company Classic Entertainment has also walked away after HIT's figures did not meet its liking.

• POLL: What does the Labour victory mean for the stock market?

Most watched Money videos