MARKET REPORT : Water revives the market stupor

The FT-SE 100 index fell 23.2 points to 3,001.9 but the FT-SE 250 index rose 3.3 to 3,394.7. Turnover was 692.5 million shares with 26,649 bargains recorded.

Privatisation shares managed to penetrate a deadly Monday stupor. The signalled French take-over bid for Northumbrian Water and first time dealings in the partly-paid generators helped overcome a yawning indifference which almost suffocated the rest of the stock market.

Northumbrian, strong last week following an analysts' visit and talk of special dividend payments, surged 128p to 870p. At one time the shares were 153p higher.

Other water shares were firm although the huge capital expenditure the industry faces stopped any runaway advance. Southern Water, up 15p at 566p, and Welsh Water, 28p at 637p, were the most responsive. Hartlepools Water, where Northumbrian has 11.97 per cent, was 3p higher at 223p.

The generators, although lively, failed to attract the volume of trading many had expected. Seaq put turnover in the new National Power and PowerGen shares at 75 million with the fully-paid variety commanding 21 million.

NP partly-paid finished at 186.5p, a 16.5p gain, with the old shares unchanged at 456.5p; PG partly-paid closed 198.5p from a 185p offer price, while the old shares shaded 1p to 491p.

Among the regional electricity groups Northern Ireland Electricity took over the take-over interest, gaining 9p to 353p after 371p. Scottish Power, often rumoured to be interested in one of the English electricity companies, was named as the potential bidder. It fell 2p to 330p.

The rest of the market was subdued by the continuing turmoil in the currency marketswith the weekend devaluation of the peseta and escudo.The flight from the US dollar, which hit a post-war low against the yen, was the main unsettling influence.

Sterling held its own for most of the session but retreated towards the close, unsettling Government stocks and early gains were replaced by falls of up to £3/8.

Groups with large US exposures took the biggest hits. BAT Industries (results tomorrow) fell 11.5p to 420.5p; Glaxo was off 11p to 648p and Bass 7p to 504p. But Redland and RMC strengthened on the back of the rampant German mark.

Glaxo was also tormented by the speculation of a counter bid for Wellcome. Zeneca, which has refused to rule itself out of the running, fell 5p to 964p. Wellcome slipped 5p to 1,036p, just a few pence below the Glaxo offer.

Hillsdown, off-loading its 56 per cent stake in the Canadian Maple Leaf Foods for approaching £300m, jumped 6p to 182p. The food and housing group is due to produce yearly results on Thursday. NatWest Securities is looking for £173.3m, up from £162.3m.

Continental Foods, the snack food and soft drink group, tumbled 8p to 69p. Since they were consolidated two weeks ago they have fallen from the equivalent of 112.5p. Chairman David Cicurel said the company was trading well and blamed the slump on a "technical market position".

Lucas Industries, the vehicle components group, advanced 6p to 187p in brisk trading. It has signed a £1bn fuel injection systems deal with Volkswagen.

The deal - and share response - could not have come at a better time for the warrants which expire in June. They provide the opportunity to subscribe for one new share at 172 p which would provide £120m for the group if fully taken up. The warrants gained 3.5p to 19p.

Ahead of figures today TI Group edged ahead 3p to 350p. The market expects about £150m against last year's £125.2m.

Vodafone dipped 2.5p to 187.5p as James Capel and Robert Fleming made cautious noises. Capel also hampered Cable and Wireless, lowering the shares 7p to 370p.

Allied Domecq and Guinness were ruffled as some profit forecasts were pulled back following the devaluation of the Spanish currency. Allied fell 5p to 507p and Guinness 5.5p to 414.5p.

Boddington, the pubs chain, was firm at 247p although Mercury Asset Management has cut its stake by 1,367,000 shares to 12.82 per cent.

Saatchi & Saatchi fell 3.5p to 87p on fears a refinancing package could be announced with next week's figures. Eurotunnel lost 8p to 258p, reflecting weakness in Paris.

Cadbury Schweppes, which has completed the take over of Dr Pepper/Seven- up, the US soft drinks group, slipped 5p to 427p ahead of figures tomorrow. Williams de Broe is looking for £477m, against £416.3m achieved in the previous year.

The computer services group Learmonth & Burchett reported a return to profits in the three months to end January. In the first nine months of its year it lost nearly £3m against a corresponding £940,000. The shares rose 1p to 115p.

WSP, consulting engineers, improved 3p to 44p as it reported a profit surge to £1.2m. The market expects about £1.8m this year. Contracts worth more than £18m are expected to be announced latter this week.

Michael Moseley, former head of the Jeyes disinfectant group, has picked up another parcel of shares in Turnpyke, the specialist engineer seeking acquisitions. He now has 11.83 per cent.

Turnpyke's chairman Eric Cater has had no talks with Monte Carlo-based Moseley and, it would appear, would appreciate a call. The shares held at 15.5p.

Metal Bulletin, the publisher, edged ahead 3p to 560p with pre- tax profits up for the seventh year in succession. The latest advance is 28 per cent to £3.25m. The group has an £8m cash pile and is looking for acquisitions. Emap, the publishing group, sits on 20.6 per cent and is expected to eventually launch a takeover strike.