BZW bears leave Storehouse firmly on the shelf

MARKET REPORT

The Storehouse retailing group, taking in such chains as BhS and Mothercare, seems unable to avoid the bearish embrace of Barclays de Zoete Wedd. The investment house's highly rated retail analysts, Charles Nichols and Tony Shiret, are again advising their followers to dump the shares.

Their sell advice follows what appeared to be a reasonable festive trading statement. The analysts doubt whether in the first 40 weeks of the current year " there is more than a marginal gain in group like-for-like sales, a poor outcome by industry standards".

They have, consequently, reduced their estimate for this year's profits by pounds 5m to pounds 120m. Last year Storehouse produced pounds 108.7m. For next year BZW is looking for pounds 136m.

The group's shares, riding at 361p in May, have since been in ragged retreat. They touched a 248p low last month, reflecting earlier negative comment from BZW, but appeared to have gained some strength from a Christmas trading statement and were holding at 275p before the latest BZW hit cut the price to 272p.

The rest of the stock market, after spending most of the session fretting about what Alan Greenspan planned to say, produced a huge sigh of relief when the US banking chief adopted a fairly neutral stance.

Last month he said share markets were overheating. His cautionary words had little impact and he had been expected to return to the cool-it-down theme.

At one time Footsie was down 26.4 points. By the close it had rallied to show a modest gain, up 1.5 points at 4,195.5. Higher interest rate worries, however, are never far below the surface and Bank of England Governor Eddie George's latest call for an increase to ensure inflation targets are met was an inhibiting influence.

The market had enjoyed much of its recent success on the back of high- flying banks and financials. There are, some fear, early signs their heady run is coming to an end which could indicate the bull market is running out of steam.

In the main the bankers more than held their own which gave a little extra momentum to the Greenspan-inspired rally.

Football clubs, for so long hitting new highs, were among the more somnolent shares, reflecting the problems of second division Millwall, suspended at 4p and in administration. Manchester Utd, Southampton, Sunderland and Tottenham Hotspur shivered a few coppers lower.

Sports retailers, another boom area, also suffered a relapse after the Office of Fair Trading said it was campaigning against alleged resale price maintenance in the supply of sports goods. Blacks Leisure dipped 7.5p to 382.5p and J David Sports 16.5p to 325p.

Vodafone was the best-performing blue chip. The shares rose 7.5p to 261p after the mobile telephone group produced figures showing a sharp customer increase. It said its overseas subscribers had topped 1 million, giving it more than 3.8 million - with 25 per cent added since the start of last year. Orange also dialled the right number, gaining 4p to 197.5p following a HSBC James Capel buy signal.

BTR put on 6p to 256p on bottom fishing and Rolls-Royce continued to draw inspiration from hopes of a German deal over its Parsons turbine operation, rising 2.5p to 242p.

Racal Electronics, up 6p to 251p, enjoyed a Credit Lyonnais Laing push but Shell shrugged off a UBS downgrading, climbing 5p to 1,036.5p.

Dorling Kindersley's fall from grace continued with the market fearing more bad news. The price of the CD Rom group fell 29.5p to 375.5p, its lowest for nearly two years.

It has already warned that weak US markets and sterling's strength were taking their toll. There are fears last month's sales were unspectacular.

Thorn's sad decline continued with a 9.5p fall to 199.5p and Somerfield, the supermarket chain, fell 5.5p to 168.5p, although figures were in line with estimates.

Life Sciences, following the pounds 236m US takeover bid, gained 41.5p to 134p but water group Mid Kent Holdings, after the Whitehall block on the controversial French strike, sank 62.5p to 572.5p.

The 600 Group, a machine tool maker, produced the day's profit warning, falling 55p to 144.5p as a result.

Jarvis, the construction group which has moved into railway maintenance rose 6p to a 160p, a peak. Talk of bids and deals are never far from the company, up from 17.75p a year ago. Monday's big trade in Ronson (22.5p) turned out to be a bed and breakfast deal.