Sterling performance by pound leaves Footsie wilting

MARKET REPORT

It was as if the fates conspired to ensure the stock market started the Christmas month in a decidedly miserable mood.

Fears of another base rate increase, underlined by Abbey National's move, an even more rampant sterling and a dull New York display were just three of the inhibiting influences.

The Racal Electronics debacle, real and rumoured profit downgradings and a temptation to lock in some profits also gnawed at shares.

Footsie, in thin trading, ended 19.5 points lower at 4,038.5 points. Second- and third-liners also wilted.

The Abbey decision unsettled building and related shares as fears grew that higher mortgage rates could choke off the still hesitant housing revival. But Abbey revelled in the change, gaining 12.5p to 709p, a high.

Glaxo Wellcome was one under the whip of rumoured forecast cuts.

There was talk a leading US securities house had decided the shares were too high and deserved to be nearer 800p. It was enough to clip the price 8.5p to 970p.

Hanson, now moving into the final throes of its painful demerger, fell 2.5p to 77.5p as NatWest Securities stuck an 81p valuation on what remains of the once powerful conglomerate.

The reduction stemmed in part from lower values for building material shares here and in the US.

Storehouse found yet a new 12-month low as the Barclays de Zoete Wedd sell advice continued to weigh heavily. But NatWest remains bullish. It believes the growth of overseas franchise operations has been overlooked. The shares fell 5p to 256.5p. Burton gained 2.25p to 151p with MeesPierson suggesting an 180p target. Racal fused 50p to 222p and Berisford International, the kitchens and bathrooms group, tumbled 9p to 135p with the mystery bidder backing away. Courtaulds slipped 3p to 397p as the chemical group's Footsie place looked increasingly vulnerable. Pilkington, another likely Footsie casualty, managed a 3.5p gain to 152p, on hopes of lower German interest rates.

Scottish & Newcastle, the brewing group, was the best performing blue chip, gaining 22p to 661p as interim figures came in ahead of most expectations. Bass, year's figures tomorrow, rose 10.5p to 794p.

Utilities threw off the lethargy as takeover hopes flickered again. London Electricity rose 11.5p to 657.5p and Yorkshire 5.5p to 764p. There were also ripples in the water sector with Severn Trent up 6.5p to 660.5p.

Semple Cochrane, an engineering services group, could have chosen a better day to make its debut. In the event it still managed a healthy premium, closing at 218.5p from a 180p placing.

On Demand Information, an electronic publisher, managed an 8p gain to 47.5p as the company said it knew of no reason for the share price decline. The shares were around 140p two months ago. Verson International, an engineer, which announced a near pounds 5.8m loss late on Friday, fell 2.5p to 14p. Clubpartners International, a golf group, bunkered itself, falling 6p to 13.5p after disclosing it had received take-over bids at below the market price. The shares were 33p in the summer.

Wiggins, the property group, fell 0.75p to 7.25p. Chief executive Oliver Iny has made peace with his creditors over guarantees he gave over a failed property company which should remove fears he may be forced to dump shares. Wiggins intends to announce its interim figures soon.

SR Gent, the Marks & Spencer clothing supplier, jumped 8p to 64.5p. The hard-pressed group disclosed it was in bid talks in October. The sudden flurry, with one deal of 25,000 shares going through at 67p just before the market closed, could indicate a deal has been sewn up.

It is understodd that more than possible buyer has been talking to the company which had to make a pounds 14m write off on the closure of its Clothing Barn retailing chain. The failure, the group's second retailing disaster, forced it into crisis talks with its bankers.

In the past year Gent's shares have been as high as 94p. They were floated through a tender off in 1984 - the strike price was 184p. Lamont, another textile group which has found the going tough, was 2.5p higher at 186.5p on vague talk of a Dutch bid. The shares have come down from 324p in the summer.

Kenwood Appliances, the kitchen equipment group, is another where a bidder hovers. The shares jumped 13.5p to 233.5p with Pifco said to be the most likely bidder.

Taking Stock

o H Young, distributing such lines as Head sports clothes and Magic Tree air fresheners, is adding cycle parts. It is paying pounds 6.86m for Madison, which sells cycle accessories.

As part of the deal, Young is raising pounds 5.78m through a placing and an open offer on a one-for-three ratio at 116p. Young's profits last year were up 30 per cent at pounds 2.6m and the enlarged group could hit pounds 4m this year. The shares fell 6.5p to 125p.

o Red faces at Ellis & Co. The stockbroker distributed four copies of a draft note on Corporate Executive Search, saying the company had achieved half-year turnover of pounds 1.23m.

But CES accounts have still to be finalised and Ellis has asked that the "rogue notes" should be disregarded.

CES shares held at 4.5p.