Market Report: Bear stories drive Footsie even lower

BEAR stories dominated the stock market yesterday, driving the FT-SE share index even lower and cutting deeply into the shares selected for special treatment.

Ladbroke Group, the betting, do-it-yourself and hotel chain, and the P&O property and shipping group were among the worst casualties.

In often brisk trading, Ladbroke shares collapsed 17p to 158p and then went a further 10p lower in after-hours trading, ending at 154p. They started this month at 215p and have been as high as 267p this year.

Once again it was worries over its US property exposure that created much of the damage. The deep depression in the hotel market and fierce competition on the DIY front are other factors occupying the market.

Some draw attention to the carnage at Forte, where the price has slumped from 262p to 151p, down another 3p, as hotel trading has deteriorated. Ladbroke, they say, has merely caught up with Forte.

Rumours that a Ladbroke trading statement was due to be rushed out today were denied.

Nomura, the Japanese securities house, recently lowered its profit forecast from pounds 225m to pounds 212m for this year and from pounds 275m to pounds 255m for next.

One analyst said the Ladbroke share slide was due to 'the perennial concern about some of the group's accounting techniques'.

P&O has been in the market doghouse for a long time. Its shares sank another 14p to 344p. They enjoyed a 555p high earlier this year. The group has been ravaged by worries about its construction and property operations and fears that it will not hold its dividend.

Lloyds Chemists was another under the weather, falling 17p to 199p as one of its brokers, Panmure Gordon, downgraded. For the year ended June, PG has cut from pounds 38.5m to pounds 35m and for this year the new figure is pounds 50m against pounds 58.5m.

Allen Lloyd, the group's chairman, is expected to meet fund managers at PG tomorrow. Lloyds is down from 337p at the start of the month.

The FT-SE share index, in another low trading session, fell 27.7 points to 2,387.9, just 5.2 above its year's low. There was some relief among chart followers that the index closed above 2,380, regarded by some as the next crucial support level.

Disquiet over June's trade figures and worries about lower- than-expected retail sales were presented as the latest inhibiting influences, joining the seemingly ever-present jitters over interest rates and the recession.

There was considerable selling of smaller company shares, with one dealer reporting 'near panic' to unload among some institutions.

Chunky blue chip lines were also on offer but were often withdrawn because the required price was not available.

Downgradings also flowed. Tesco eased 3p to 239p as a number of modest reductions appeared. Barclays de Zoete Wedd lowered Sedgwick, the insurance broker. It cut this year's forecast from pounds 85m to pounds 74m and next year's from pounds 108m to pounds 86m. The shares fell 6p to 161p. More than 1 million were placed at 163p on Tuesday.

Rothmans International fell 20p to 1,054p following the sudden departure of Ray Weekes as chief executive of Rothmans Holdings, the 50 per cent-owned Australian operation. Expamet International declined 14p to 71p. Jeremy Beasley quit as chairman and reduced dividends were forecast.

Euro Disney dipped a further 25p to 1,023p on disappointing trading and talk of price cuts. Rank Organisation fell 19p to 553p.

Properties were firm, helped by positive noises from UBS Phillips & Drew, and oils attracted US interest. Higher profits pushed Southend Property up 6p to 42p. Assets are said to be 116p a share with 25p in cash.

An oil and gas strike in Morecambe Bay pushed Monument Oil & Gas, with a 20 per cent interest in the venture, 1p higher to 32.75p but Lasmo, with 30 per cent, lost 1.5p to 125p.

Reuters fell 36p to 1,090p, reflecting results. Mirror Group Newspapers continued to make headway, up 1.75p to 65.25p. Trading was again brisk.

The supermarket chain Asda, the subject of bullish option activity, shaded 0.25p to 26.5p. Budgens dipped 2p to 37p as a line of 7.1 million was placed at 35p.

Construction shares were generally lower. Spring Ram slipped 2p to 133p as PG placed 1 million shares.

Rubicon Group, the contractor formerly called Courtney Pope, jumped 20p to 123p on its return to profits and a buy recommendation from stockbroker John Siddall.

The French Heriard Dubreuil family is providing support for Highland Distilleries. As part of the links forged with the Remy Cointreau drinks group two years ago, the Heriard Dubreuils agreed to buy 10 per cent of the Scotch whisky group through the market. This week the acquisition of 2.6 million shares lifted the French stake to 5.5 per cent. Highland shares are 251p.

Berkeley Group, an upmarket housebuilder, is riding the construction storm far better than most. It recently declared profits of pounds 12.6m and County NatWest expects pounds 17m this year. And directors seem to like the shares. The chairman, Graham Roper, has purchased 10,000 and the chief executive, Tony Pidgley, 50,000. They paid 224p. Yesterday's close was 223p.