Rate cut hopes push blue chips higher

Market Report

BLUE CHIPS scored their eighth gain in a row as the stock market banked on another base rate cut today.

In subdued trading Footsie rose 21.5 points to 6,453 making a 226.8 gain since the present bull run got underway. Although the last eight-strong winning streak occurred only two months ago, such a succession of plus signs is unusual.

However, the latest string of gains has been achieved in relatively humdrum conditions with little excitement and not much determined buying. Despite Footsie's progress it is nearly 150 points below its April peak.

Unilever, the Anglo Dutch detergent and food group, led the Footsie advance. The shares rose 27.25p to 572.5p with evidence of at least two large buyers, possibly American, and suggestions of US analytical support. The restructuring planned by arch rival Procter & Gamble was thought to have directed trans- Atlantic attention towards Unilever.

Intriguingly Reckitt & Colman, the household goods group which has for long been seen as an obvious Unilever target, was also on the uproad - gaining 23p to 726p.

The tandem advance could have been a mere coincidence. On the other hand there is no doubt that if cash-rich Unilever is contemplating a strike it could hardly pick a better moment. R&C has been beset by problems and its shares are bumping along near their 12- month low. Last year they touched 1,300p.

BG flared again on talk of a Shell strike gaining 15p to 393.25p. But some feel a more likely target is Centrica, 3p firmer at 134.75p.

Showbiz group EMI continued to spin higher on bid talk, gaining a further 13p to 493.25p. Telewest Communications, still talking merger with Cable & Wireless Communications, firmed 5p to 280.25p while C&WC fell 6.5p to 572.5p. Cable & Wireless, the telephony group controlling C&WC, was little changed at 822.5p following the success of its Japanese bidding war which, so far, has given it 53 per cent of telecoms group International Digital Communications.

Kingfisher, edging towards the completion of the Asda superstore takeover, improved 29p to 829p. It seems that a reference to the chain's Liberty Internet service provider sparked the interest. Its progress helped Asda, 4.5p higher at 186.5p.

Allied Irish Bank counted a 12p gain to 924.5p as bid speculation re- appeared. At one time the market was convinced that Lloyds TSB was about to strike and sent the shares spiralling to 1,262.5p. If Lloyds did plan an Irish assault it has been beaten by Alliance & Leicester, the building society cum bank, which is hoping to link with Bank of Ireland to form a pounds 12bn group.

The Footsie changes, which will take place on Monday week, were very much as expected with Anglo American, the South African investment and mining group, barging its way into the exclusive club and Blue Circle Industries, the cement group, reclaiming its place. Next, the fashion chain, and Sema, a computer group, were relegated.

The blue-chip index, which long ago ceased to reflect the nation's health and wealth, now has three South African constituents. Newcomers to the Mid Cap index included Enterprise Inns and the Fairey engineering group.

Granada's mid-term results, although ahead of expectations, left the shares 21p lower at 1,294p. The leisure group duly announced a two-for- one share split.

Norwich Union firmed 10.75p to 433.5p after Commerzbank adopted a slightly more positive stance, moving from sell to hold. Invensys was little changed at 291p; Goldman Sachs set a 340p target. The engineer bought in 6.55 million shares through Cazenove at 292.9p.

WPP, the advertising agency, was a casualty of the Procter & Gamble cut backs; the shares fell 17.5p to 512p as the market fretted that the reshaping by WPP's largest client must hit fee income.

Utilities remained weak on regulatory worries with Thames Water sinking 12p to 1,025.5p.

BTG, the old British Technology Group, jumped 28p to 298p - too late to prevent its removal from the Mid Cap index. The gain was put down to meetings with institutional investors. Arjo Wiggins Appleton, the packaging and paper group, firmed another 7p to 207.5p - the group held an investment meeting yesterday. De La Rue's investment dinner with Investec Henderson Crosthwaite lifted the shares 8p to 358.5p.

Jarvis Hotels edged ahead 4p to 155.5p on revived bid gossip. And London Clubs International, the casino group, gained 3p to 143p on talk of corporate action.

The long-running discotheque and bowling ally takeover session ended with Allied Leisure claiming 56.62 per cent of European Leisure. Allied held at 23p and EuroLeisure at 92p. Waterfall, which mounted a hostile counter bid for EuroLeisure, fell 3p to 52.5p.

Quadrant, an electronics group, sparked 24.5p higher to 95p as a bidder hovered. Money brokers Garban, up 11.5p to 266.5p, and Intercapital, 3.5p to 37p, said they were talking merger.

Albert Fisher, the struggling food group, hardened 1.75p to 14p on a variety of stories including a major disposal and an Internet link.

British Steel was again flat after its Dutch merger party. The shares fell a further 2.75p to 143.5p as the spectre of mill closures and pollution costs cast a pall over the shares.

Expamet International, an engineer, fell 11.5p to 104p; chief executive Phil Reader, who made an impressive presentation to stockbrokers recently, has quit to join packaging group Low & Bonar. But its an ill wind...L&B jumped 25p to 195p.

Alldays fell 5.5p to 74,5p as the company acquired three associates and talked about a"substantial" profits erosion. The shares were 621.5p last year.

SEAQ VOLUME: 922.1m

SEAQ TRADES: 66,650

GILTS INDEX: 106.53 -0.13

CORONATION INTERNATIONAL Mining is thought to be planning a bid which will give it a full listing. A shell is the likely target and a deal is expected in the next few months. The Ofex-traded group is the mining off-shoot of an African plastics-to-textiles conglomerate. CIM recently established joint ventures with Anglo American and Ashanti. Its shares arrived on Ofex a year ago at 21p; they are now 30.5p.

BERNARD ARNAULT, the French tycoon who runs LVMH, has pumped more cash into Ofex-traded iCollector. The Internet-based antique dealer and auctioneer raised pounds 2m selling shares at 400p and Markas, a company related to Mr Arnault, participated to retain its stake at 20 per cent. Deals are flowing fast with iCollector linking with Internet player Excite and arranging to host an Elvis Presley memorabilia auction over the Internet. The shares are 455p.