MARKET REPORT: Busy BT prevents rout as interest rate gloom emerges

BT prevented a Footsie rout. The proposed pounds 13bn deal with US group MCI helped the telecom giant ring up the day's best blue chip gain and encouraged other telephone shares. Footsie ended 20.4 points down at 3,928.1 after an early 7.7 advance.

At one time BT was up 33p to 384p. But for the sixth time in a year the charge faltered in the 380ps and the shares ended with a 22p gain to 373p.

In turnover terms BT was also the dominant force.

Seaq put volume at 82.4 million shares out of an uninspiring stock market total of 648.8 million.

Vodafone, moving ahead last week on demerger and AT&T bid hopes, improved 5p to 241p and Orange edged up 1.5p to 185.5p. But Cable and Wireless, which rejected the BT embrace earlier this year, fell 6p to 483.5p.

BSkyB was also unsettled by the planned transatlantic deal. It fell 22p to 547p on thoughts about the powerful challenge the giant new grouping could represent and MCI's 13.5 per cent stake in Rupert Murdoch's News International which is using its BSkyB shares in a $1bn cash-raising exercise. Details of the Murdoch cash scheme are about to be completed.

The satellite television station has presented a poor picture since it hit a peak of 697p last month.

The US presidential elections, the lowering of the Government's majority to just one, talk of interest rate increases in the new year and the strong pound prompted blue chips to back-pedal. Reports of a US missile attack on an Iraqi air defence site was another inhibiting influence.

Oils remain weak with Tullow Oil down 8p to 76p. The shares have come back from 118p since it reported disappointing drilling results in Pakistan.

Electricities managed a few modest gains as bid hopes continued to flicker; East Mildands Electricity put on 5.5p to 550p. The communication sector remained on bid alert with Carlton Communications, unchanged at 491p, said to be preparing to strike with a few traders, to the surprise of the majority, pointing to Yorkshire-Tyne Tees as its most likely target.

British Biotech's keenly awaited research update was less encouraging than many had hoped and the shares fell 21.5p to 207.5p.

Kwik Save, figures on Thursday, remained depressed with a 17p fall to 302p; Shoprite, reporting interim profits of pounds 958,000, fell 1.5p to 18p.

Kingfisher surrendered 11p to 635p on worries it is about to unleash another French strike - taking over a do-it-yourself operation.

Chelsea Village, the football club, had an eventful session with the price at one time nudging 120p. The shares closed at 113.5p, up 16p. Suggestions that the death of vice-chairman Matthew Harding could lead to takeover action, with even legendary trader George Soros being mentioned as a possible predator, created the excitement. Granada was another name in the frame. Manchester Utd, conquered by Chelsea over the weekend, had to sacrifice another 13.5p to 515p.

Wellman, the engineer hit last week by a profits warning, managed a modest rally, up 2p to 33.5p. There are suggestions the fall - from 49p - has been overdone. It would appear profits this year could emerge at a reasonable pounds 8m which has prompted one stockbroker, thought to be James Capel, to put a 42p price tag on the shares.

There is also talk the fall could encourage predatory interest with FKI, down 2.5p at 206.6p, the name in the frame.

Property group Burford was little changed at 136.5p as chief executive Nick Leslau cashed in options, raising more than pounds 5m. Barclay de Zoete Wedd placed the shares at 135p. Jacques Vert, the clothing group with the distinction of producing three profit warnings in a year, rose 3.5p to 37.5p as John Shannon picked up a 5.74 per cent interest.

The shares are thought to have, indirectly, come from Fidelity, the US investment house.

Mr Shannon is a former chairman and chief executive of Country Casuals, the fashion retailer he returned to haunt with a fierce but ultimately unsuccessful takeover bid a year ago.

Honeysuckle, a fashion wear group, remained suspended at 39.5p. There is a belief retailer Philip Green is interested in buying into the company.

Volume was turned down at Verity, which has soared since developing a wafer-thin sound system.

The shares fell 8.25p to 32.25p following adverse weekend comment.