Investors breathe again as 'crash' proves to be a hiccup

The expected crash turned out to be no more than a gentle tumble. At its lowest the FT-SE 100 index was down 23.2 points; it closed 4.9 off at 3,400.4.

New York was again in a highly volatile state, scuttling between gains and losses.

But there is no doubt that the 107.42 fall suffered by the Dow Jones Average in just two trading days has rattled the stock market which had appeared to be moving ahead with sublime confidence.

For once, the yawning gap between Footsie and the DJA seems to have worked to London's advantage.

Many have been bewildered by London's inability to respond more positively to the US exuberance. A 1,300-point gap between the two indices was regarded as a cause for dismay.

But London's unwillingness to cling to Wall Street's coat-tails has clearly provided a safety cushion, allowing it to absorb the impact of the New York slump in some style. Trading was, however, subdued. The early fall reflected sharp, defensive mark-downs.

Then a few buyers illustrated the folly of the early knee-jerk reaction and the market settled down to an uneventful and, of necessity, boring session.

A few takeover rumours endeavoured to enliven the proceedings. Healthcare group Smith & Nephew rose 2.5p to 189p in brisk trading. A buyer for 100,000 shares with the market short of stock seemed to provoke the latest advance.

BTR edged ahead 1p to 341p as stories of developments at BTR Nylex, its 63 per cent-owned Australian off-shoot, drifted around. The rumours were vague, varying from the extremes of BTR taking full control to the possibility of cash being raised through reducing its interest.

Ian Strachan, chief executive-designate, joined the industrial conglomerate in April. He takes over from Alan Jackson, who joined from BTR Nylex, early next year.

Financials also attempted to inject some life into the market. Hambros gained a further 4p to 210p on the theory that it will be the next merchant bank to attract a foreign predator.

Hambros shares slumped to 182p when it announced poor trading and its first dividend cut. Last year the shares were 315p. The lack of action at Smith New Court left the shares 5p down at 517p.

Hopes that Trafalgar House is at last being stirred into action lifted its expected target, Northern Electric, 18p to 863p. But United Biscuits slipped 3p to 295p as the excitement following its poor trading statement, died down.

Eurotunnel had another difficult session on competition worries. The shares lost 6p to 179p. P&O was also ruffled, off 3p at 578p.

On the brewing pitch Barclays de Zoete Wedd took Whitbread off its buy list, lowering the shares 9p to 630p; top-slice advice from Kleinwort Benson clipped Bass 4p to 635p.

WPP, the advertising group, rose 2p to 136p, taking its market capitalisation above pounds 1bn for the first time.

Magnum Power's results left the shares 35p down at 128p pulling back Tadpole Technology, again the private investors' favourite share according to ShareLink, 9p to 87p.

Building shares were firm, on continuing hopes of relief for house owners. But barometer stock, Barratt Developments, lost 5p to 201p on James Capel sell advice.

Enviromed, the health care group where there is talk of a takeover bid, gained 11p to 52p. Some argue the offer could come in near the 110p share placing two years ago.

Telemetrix, the electrical components group, gained 8p to 88p following a confident trading statement. But Southend Property dipped 2p to 41p after a 60 per cent profits setback. Forth Ports gained 9p to 557p, a peak. The firm was privatised three years ago at 110p.

Southnews, the newspaper group, put on 4p to 266p. It moves to a full listing today. The current year had started well and trading was ahead of budget, it said. Amstrad, the electronics group, again attracted buyers, gaining 4.5p to 250p, on speculation about a new digital telephone coming on to the market.

The shares have climbed from 127.5p this year.

JKX Oil & Gas made further headway, up 5p to 211p against the 190p placing level.

Lurking on the 4.2 market is a little Canadian company, Terrenex, which has a 29 per cent interest in JKX.

Terrenex intends to distribute its JKX shares to its own shareholders.

But the Canadian group's shares are in short supply and there is some doubt whether any available would qualify for the JKX distribution.

With Terrenex at 115p the JKX shares help provide an asset backing of around 135p.

Firecrest, a sales promotion group, made its debut on AIM, gaining 2p to 40p from its 4.2 price.