Market Report: Falklands oil tiddlers make the biggest splash

OILS, ranging from the behemoths to the tiddlers, provided the stock market action.

Shell strengthened as a debate developed about the tone of an investment presentation in The Hague this week and little Greenwich Resources continued to thrive on expectations of rich strikes off the Falkland Islands.

As is so often the case it was the little'uns which created the excitement.

Desire Petroleum led the charge. It is deeply involved in the Falklands search. Floated at 125p last month the shares flared a further 108.5p to an astronomical 414p. On Tuesday Desire said encouraging oil and gas shows had been encountered in drilling off the islands. Since then its shares and those of associated groups have enjoyed a bonanza, reminiscent of the days of the Australian minerals boom of the 1960s.

Since Tuesday Desire has surged from 164.5p. And Greenwich Resources and Westmount, each with stakes in Desire, have romped ahead. Greenwich rose 9.5p to 38p; it was 18.75p on Tuesday and Westmount has gone from 145p to 235p, up 45p yesterday.

Lasmo, also in the Falklands equation, gained 6.5p to 290p. It made further oil discoveries in Algeria.

Shell's Hague presentation has had a decidedly mixed reception. On Wednesday the stock market took the view it was a downbeat affair. Securities group Lehman Brothers talked about a cautious meeting and suggested the Anglo Dutch giant's shares, up 6p at 454.5p, would under perform. But the BT Alex.Brown investment house was sufficiently encouraged to suggest the shares should be bought.

Oil shares could, some feel, be the subject of corporate action once the Government's review of the North Sea taxation regime is completed.

The obvious temptation is to hold off until the changes, if any, are known.

After an 83.7 points gain in early trading, Footsie spent the rest of the session in gentle retreat, ending with a 28.2 gain at 5,935.6. Supporting shares remained confident with the mid and small cap indices stretching to yet new peaks.

Takeover talk was again in the air. Rentokil Initial, the environmental group, jumped 17.75p on expectations it was flexing its muscles for corporate action. Favourite target is Compass, the contract caterer, which improved 41p to 1,227p, a peak.

Safeway, up 10.25p to 380.5p, was the subject of speculation about a joint Asda/J Sainsbury strike. More likely is a takeover by British Land with Asda cherry picking the Safeway stores it wants for its own portfolio.

Mirror, the newspaper group, remained in the bid spotlight, gaining 4.5p to 211.5p. It is understood no approach has been made.

Misys "celebrated" its arrival in Footsie, the first computer group to achieve membership, by heading the list of blue chip losers, falling 153p to 3,417p.

ComputaCenter, which arrived in its when- issued form, closed at 766p, after touching 822.5p. The issue was 12 times oversubscribed with the issue priced at 670p, the top of the range.

Other IT shares remained firm. FI put on 57.5p to 1,557.5p and MSB International 32.5p to 1,035p.

ICM Computer, although overshadowed by ComputaCenter, made a successful debut. Placed at 180p the shares closed at 260.5p.

Cox Insurance, replacing Misys in the mid cap index, gained 23p to 516.5p.

ML Laboratories, which has fallen from 180p in the past year, firmed 4.5p to 99p on Swedish reports that Astra, the nation's top drugs group, fears competition from ML on the inhalant front. ML's Clickhaler is expected to get Euro approval soon.

Millennium & Copthorne, the hotel chain, fell a further 18.5p to 576p following share sales by the controlling shareholder but family-run Burtonwood Brewery continued to move ahead, climbing 1.5p to 179p. The shares are at a 12 month peak, a sharp contrast to most regional brewers.

More, the advertising group, rose 13.5p to 1,130p following Clear Channel's higher offer and share buying after the monopolies referral of the rival Decaux offer.

Prestwick, the electronics group, ended 2p lower at 35p; at one time the shares were down 10p. A warning of losses was softened by TT, the aggressive mini conglomerate which sharply lifted its share stake to approaching 25 per cent.

Paramount Foods, the former Canadian Pizza, fluffed up 14.5p to 126p on a possible management bid at 135p. Waverley Mining held at 16.5p. Rackwood Mining, the coal miner, appears to be prepared to offer 25p a share but Waverley is hoping for more.

VideoLogic, up 6p at 91p, confirmed its Sega deal. After months of speculation it said it had won agreement to have its second generation 3D technology in the new Sega console.