Market Report: Builder's merchants lay foundation for advance

BUILDER'S merchants enjoyed the unusual distinction of leading the stock market higher. The results from Wolseley provoked the excitement. The group's figures were comfortably ahead of expectations, driving the shares 73p higher to a peak of 975p.

The interim performance - profits up from pounds 47.6m to pounds 87m - prompted stockbroker Panmure Gordon to revise its year's forecast from pounds 163m to pounds 202m. For next year it has gone from pounds 200m to pounds 254m. Splendid figures from Heywood Williams, helping the shares up 7p to 437p, also contributed to the building excitement.

It was enough to lift Meyer International 29p to 545p and Travis Perkins, figures tomorrow, 13p to 359p. Marley, expected to produce pounds 32m today against pounds 8.1m, gained 5p to 205p. Grahams, last week's newcomer floated at 183p, improved a further 8p to 214p. But builder George Wimpey, despite a dramatic trading improvement, ended 8p down at 210p.

The rest of the stock market was in ebullient form. The FT-SE 100 index rose 34 points to 3,267.4 with trading a little more determined than on Monday.

The continuing flow of upbeat company statements, with better- than-expected dividend payments, is providing unexpected cheer. A seemingly encouraging set of US statistics, which failed to inspire early New York trading, and the never far below the surface hopes of lower interest rates spurred the excitement.

The latest round of interest rate speculation was fuelled by US comments that European rates should be lowered; hints from Germany of cuts at tomorrow's Bundesbank meeting; and signs that UK retail sales growth was flagging.

The continuing stability of the bond markets was another important influence. Gilts were up by one-and-a-quarter points at the longer end of the market.

The expiry of the futures contract on Friday continued to influence sentiment, although it is clear its impact will not be as dramatic as at one time seemed likely.

Vodafone, the cellular telephone group, had a busy session, down 4p at 571p. UBS placed 5.9 million shares at 564p. They were sold to provide finance for a one-third stake in a mobile telephone operation.

NatWest Securities, which helped water shares higher on Monday, turned its attention to electricities. Bullish comments lifted the sector, with generators National Power and PowerGen particularly bright.

Banks were firm with Barclays again leading the pack. It gained 22p to 555p with last week's results continuing to inspire buyers. But Standard Chartered fell 17p to 1,092p as it became apparent that difficulties were being experienced placing a large line of stock.

Simon Engineering edged ahead 1p to 118p. Following its pounds 50m rescue rights package, Barclays de Zoete Wedd has switched its recommendation from hold to buy.

Euro Disney managed a 5p gain to 395p; Guinness, ahead of results tomorrow, put on 7p to 509p.

Ingham, the textile group now a force in car parts distribution, experienced a ragged reverse following a profit warning, ending 31p down at 131p.

Brown & Jackson, the Poundstretcher retailing group that ranked as the best-performing share of 1992, crashed 3.75p to 2.75p as it disclosed it had disagreed with its bankers.

Owen & Robinson, the footwear and jewellery group, jumped 8p to 34p on reports that Philip Green, the former driving force at the Amber Day retailing group, was about to buy a stake and assume a role in the management.

Takare, the health-care group rocked by a boardroom upset, fell a further 17p to 249p. Fears are growing that ousted managing director Dev Pritchard will attempt to unload his 9.2 per cent shareholding.

Andrews Sykes, the air conditioning and pumps group, rose 5p to 90p as the long-threatened shareholder rebellion erupted. The wealthy French businessman Jacques Murray, who runs European Fire Protection, is seeking board representation. He failed to take control at an egm in 1992.

The Andrews Sykes management is in talks with Mr Murray's representatives and a compromise deal may be hammered out. The Murray interest of just below 30 per cent was purchased at an average of 130p a share.

In December Andrews Sykes reported a half-year loss of pounds 2.3m against an pounds 800,000 profit.

Another rule 535 launch. Dealings are expected to start next week in the shares of Just, a character-licensing specialist. The float, expected to value the company at pounds 1.5m, is being handled by the stockbrokers Keith, Bayley, Rogers. One of those behind the launch is Stephen Barclay, a prime mover in the Upton & Southern retailing group revamp.

Still more buying of Signet preference shares. South Africans Julian Tregar and Brian Myerson, noted for their intervention at the Greycoat property group, are expected to announce that, with friends, their stake now tops 21 per cent. They will, therefore, have an important say in any restructuring. Signet, which is regarded as a recovery play, rose 0.25p to 38.5p.

Roxspur, formerly Levercrest, is due to return to market today. The shares were suspended at 26p to accommodate a pounds 4.7m takeover and a pounds 5m placing and open offer at 21p. The group acquired Brearley, which makes temperature measurements for industrial processes, from Anglo United, the struggling fuel group. Roxspur has made losses for the past three years.