Market Report: Determined but discreet buying buoys Silentnight

IN what has become a dozy stock market, shares of Silentnight, Europe's biggest bed maker, have shown signs of reawakening from their summer slumbers.

In the past week they have risen from 208p to touch 240p. They closed at 236p, up 3p.

Buying has been determined but discreet. According to Seaq only 10,000 shares changed hands yesterday.

The group has looked vulnerable to a strike since its founder and controlling shareholder, Tom Clarke, fell out with the board last year. He wanted the year's dividend cut because the company was not retaining enough of its profits. But he was defeated, enduring the added humiliation of failing to gain the support of the trusts representing his family's 51 per cent shareholding.

Since then the company produced profits of pounds 12.4m but Bill Davies, chairman, has twice felt obliged to issue profit warnings this year. The market consensus is that year's profits will emerge at around pounds 12m but the stockbroker BWD Rensburg is more cautious, looking for pounds 10.4m.

The speculation is that the Clarke shareholding could be about to change hands, triggering an obligation for a full bid. The shares touched 378p in February.

The Service Corporation International offer for Plantsbrook, the undertaker, came too late to enliven the day's proceedings. Plantsbrook climbed 8p to 173p; the 175p offer was announced after hours.

The rest of the market spent the day regretting a rush of early euphoria. At one time the FT-SE 100 share index, inspired by futures activity, measured a 25.7 points gain.

But an indifferent New York performance nagged away at sentiment and by the close the 100 index was struggling to hold a 6.2 plus to 3,222.7.

With US bonds suffering from inflation worries, government stocks failed to retain early strength and were down by up to pounds 1 when trading closed.

Interest-rate worries are gnawing at confidence. Next week the Chancellor, Kenneth Clarke, and the Governor of the Bank of England, Eddie George, are due to hold their monthly meeting on the economy.

'The decision ought to be to raise base rate,' Richard Jeffrey, an economist at Charterhouse Tilney, said. He added: 'The economic risks are marginal but the rewards from such a signal are potentially life-saving for this government'.

The market is moving increasingly to the view that base rate will go up to 6 per cent. Some observers think such an uplift would help equities, removing an influence the market dreads - uncertainty.

The last US interest-rate increase was well received in New York, helping to fuel London's August advance.

Tate & Lyle edged forward 2p to 441p following an investment presentation; Reckitt & Colman, which confirmed interest in Eastman Kodak's household goods division, fell a further 11p to 616p.

British Aerospace, largely on continuing talk of a General Electric Co bid, rose 15p to 513p. GEC, after the yearly shareholders' meeting, shaded 1p to 302p.

Utilities had another ragged session. An early rebound, following 3.5 million share buy- backs by South West Electricity, merely encouraged some investors to snatch the profits achieved since the lenient demands of the regulator, Professor Stephen Littlechild, became known. SWE fell 6p to 816p; Eastern lost 18p to 795p.

Waters were also subdued, with Anglian lowered 13p to 567p.

Body Shop International continued to recover from the controversial Business Ethics article, improving 6.5p to 230.5p. Vodafone, the cellular radio group, slipped 5.5p to 200p as it appeared that US investors had marginally cut their collective ADR shareholding.

WPP, the advertising group, edged ahead 1p to 120p as the banks prepared to unload their debt-for-equity shares. SG Warburg is expected to place many when dealings in them start on Monday.

Rodime, a play on US litigation being successful, jumped 4p to 12p; the stock shortage at Magnum Power pushed the price to 53p with a 52p close, up 3p. Menvier-Swain held at 225p after it admitted it was keeping an eye on Scantronic, involved in a rescue rights issue. But it said it had not approached the security systems group, unchanged at 26p.

Tomorrows Leisure, up 3p to 14p, is in talks that could lead to an acquisition, which is likely to be accompanied by a cash call at 10p a share.

The engineer Fife Indmar held at 55p after interim profits slightly higher at pounds 431,000. The stockbroker Bell Lawrie White is thought to be bullish, forecasting profits of more than pounds 1m for the year, against pounds 903,000 last year.

Tottenham Hotspur's run continued, up 8p to 159p. The shares have scored a 52p gain since the Premiership season kicked off.

Kynoch, which found life hard as a tweed maker, has yet to produce a convincing performance as a healthcare group. But the shares perked up 3p to 25p yesterday on hopes profits this year would comfortably top the pounds 600,000 expected by the company's stockbroker, Panmure Gordon. Shareholders have had an uncomfortable ride. The shares touched 231p five years ago.

Upton & Southern, the retailer, drifted another 0.5p lower to an 8.5p low. The shares were 26p when it announced it had hit problems with the Reject Shop chain, acquired in April. It made it clear it needed to raise new cash and is thought to be holding meetings in the City to back a rights issue. U&S made a pounds 4.5m call when it took over the Reject business.

The FT-SE 100 index closed 6.2 points higher at 3,222.7. At one time it it was up 25.7. The supporting FT-SE 250 index fell 13 to 3,781.3. Turnover reached 715.8 million shares with 28,859 bargains recorded. Gilts fell by up to pounds 1.

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