Utilities generate a more positive mood in London

MARKET REPORT

Utilities, although under threat of a windfall tax and likely to suffer more than most from any change of Government, helped the stock market resist the latest round of American jitters.

National Power and PowerGen were comfortably the best performing blue chips and Severn Trent and Thames Water waded in with important contributions.

With the Labour manifesto free from any unpleasant surprises and a suspicion arising in some quarters the party's policies could eventually be beneficial to the generators NP gained 17.5p to 496.5p and PG 16.5p to 608.5p.

The power giants were helped by favourable comments from investment houses, Credit Lyonnais Laing and Panmure Gordon.

Severn Trent rose 11p to 698.5p and Thames 6.5p to 666.5p.

The rest of the market had another downbeat session although Footsie's retreat was a relatively modest 22 points to 4,214.6. Tax deals again prompted much of the dealing.

There was little incentive for investors, big and small, to take new positions in the dying gasps of the tax year and with the key but unpredictable US non-farm payroll figures due today.

On a number of occasions the US statistics have provoked volatile market gyrations. With New York on tenterhooks over interest rates the scene could be set for another dramatic sell-off; certainly Wall Street is in no mood for any more anxiety.

Although the election has yet to have much impact on general market sentiment, Footsie has fallen on nine of the 12 days since John Major's call to the polls; losing more than 200 points.

Rolls-Royce, a privatised group but in no danger of a windfall tax, was another high flyer, climbing 5p to 237p. It is thought to be near to clinching a deal to sell its steam power units, with a German group rumoured to have made what many would regard as a generous offer.

BSkyB, up 7.5p to 612p, responded to talk of Matsushita of Japan taking a stake and Rank improved 9p to 436.5p on renewed speculation it would soon sell its remaining 20 per cent interest in the Xerox office equipment operation.

BOC, the chemical group, was another resisting the downward pull, as its big American rival, Praxair, raised its carbon dioxide and hydrogen prices. The shares rose 8p to 940.5p.

Oils were unsettled by a further sharp decline in the crude price; the mild weather is a big influence. British Petroleum fell 12.5p to 683.5p and Shell 13p to 1,041.5p. Enterprise Oil tumbled 22p to 615.5p and Lasmo 10.5p to 224.5p.

Reuters, off another 12.5p to 576.5p, and SmithKline Beecham, 19.5p to 848p, were casualties of Wall Street and Glaxo Wellcome was trimmed 6p to 1,087p on its dear doctor letter warning about side effects of its Lamictal epilepsy drug.

SBC Warburg caution was said to be responsible for a 9.5p decline to 666.5p by Scottish & Newcastle and British Aerospace was lowered 16p to 1,346p as its chances of a significant involvement in the Thomson-CSF sale dimmed following the General Electric Co intervention.

In busy trading Sears firmed to 74p on talk of a break up bid, possibly from Germany .

Results lifted engineer Laird 44.5p to 389p and computer group Sema gave up 38.5p to 1,301.5p as the French electrical group Schneider, sold its 5.1 per cent stake at 1,295p.

Airtours, the holidays group, fell 38p to 923.5p as the US Carnival Corporation denied plans to lift its 29.6 per cent stake.

AH Ball, a building group, slumped 7p to 25.5p after a profit warning and Cemetone, the paint business, gained 13.5p to 60p as entrepreneur Laurie Lewis acquired just under 30 per cent; a reverse takeover deal looks likely.

On Demand Information overcame its apparent surprise about talk of an upbeat statement, disclosing a link with United News & Media; the shares added 2.5p to 45p.

Rugby Estates, once part of Hillsdown Holdings, was little changed at 133.5p after achieving a 125 per cent profits advance to pounds 2.4m. BZW believe profits will reach pounds 2.7m this year with NAV moving to 181p. Analyst Alan Carter says Rugby's strong management should come into its own as the property market improves.

Newcomer Harvey Nash, an IT recruitment business, traded at 180.5p from a 175p placing. Melrose, the oil group held at 20.5p, as 54.7 per cent of its offering in its Sibir off-shoot was taken up.

Taking Stock

Professor Richard Conroy, former head of Arcon International Resources, is planning to bring a fledgling Irish gold company to the fringe Ofex share market. Conroy Diamond and Gold has a gold prospect at Clontibret, County Monaghan, on which up to a 100 hole drilling programme is planned. Arcon discovered the Galmoy zinc-lead mine, which recently come into production, in County Galway 11 years ago.

Note the continuing strength of Matheson Lloyd's, one of the obscure breed of insurance investment trusts. The shares rose 4.5p to a 125.5p peak; they have risen from 100p last month and 81p a year ago. Take over talk is behind the move. Goshawk Insurance and Benfield & Rae are regarded as likely predators.