Market Report: Bid punters help FTSE 100 resist the oil slippage

IT'S AN ill wind... as oil shares wilted on the back of tumbling crude prices, British Airways climbed higher, enjoying the prospect of declining fuel bills.

The airline has had a torrid time of it lately, with profits and image coming under intense pressure. Its shares, which have fallen from 553.5p in April, rose by 21p (after 34.5p) to 416.5p in brisk trading. They touched 760p in 1997.

Jet fuel represents up to 15 per cent of an airline's costs, and the sharp crude price fall in the past week should impact immediately on BA's bottom line - the airline says it has only hedged some 55 per cent of its current year's fuel costs. In the previous year it was fully covered.

But oil stocks lost almost 4 per cent of their value as the crude price sunk below $20 a barrel. BP Amoco, accounting for approaching 10 per cent of the FTSE 100 index, tumbled 50p to 1,162p and Shell 18.75p to 504p.

Enterprise Oil gave up 30p to 442p and Lasmo 6p to 150p. Even little Emerald Energy, which this week seems to have struck it rich in Colombia, could not resist the downturn, off 0.5p to 4p.

Despite the oil battering the FTSE 100, after some dithering, managed to close with a gain - up 14.4 points at 6,383.9. At one time it was 64.9 higher. The mid cappers made moderate progress, but the Small Cap index jumped 14 points to 2,805.4, comfortably achieving a new peak.

A little of the FTSE 100's strength stemmed from FTSE International's planned changes over the way it treats family-dominated Footsie constituents. Fears that they would lose their FTSE 100 positions have been erased. So Associated British Foods, where Weston family interests have more than 50 per cent, headed the Footsie leader board with a 24.5p gain to 437.5p.

Schroders, the merchant bank where family interests account for more than 40 per cent of the share capital, rose 39p to 1,405p, although the non-voters were little changed at 1,150p.

Safeway, the supermarket chain, remained in the spotlight, gaining a further 8p (after 10.5p) as bid punters again filled their baskets. Turnover nudged 7.5 million shares, with speculators again prepared to bank on a bid materialising - Royal Ahold of Holland remains the name in the frame, along with Kingfisher, off 5.5p at 714p.

The swirling bid gossip in the retail sector also embraced Storehouse, up 3.5p at 118.5p, and Selfridges, where British Land has 9.4 per cent, 10p to 266.5p.

Church & Co, the shoe retailer, stepped 27.5p higher to a 757.5p peak as speculation of an Italian strike continued. And Allied Carpets, where the bid action is piling up, jumped 18.5p to 86p. Wassall, with 23.7 per cent, bid 80p only for a French group, Tapis Saint-Maclou, to declare an interest in bidding.

Just to add to the retail clamour Signet, the jeweller, continued its revival, up 3p to 53.5p. Deutsche Bank lifted its target price 10p to 80p.

Reports that Northern Leisure, the discotheques chain, is involved in merger talks with Luminar, rocked the shares 10p higher to 193p; Luminar, the Chicago Rock outlets chain, ended 25p stronger at 957.5p.

Rumours of bid action are swirling around the leisure industry. First Leisure and Rank have put their night-clubs on the market and Northern,under new management, is rumoured to have expressed interest in both chains.

Last week, in a venture capitalist-backed deal, Allied Leisure acquired First Leisure's ten-pin bowling interests.

Unilever, the Anglo-Dutch detergent and food giant, rose 9p to 606p. At one time there was talk that it was about to pounce on Clorox, one of the largest household product groups in the US. But the rumour was said to be the result of a "misunderstanding" during a telephone conference held by the Americans.

Brewers were encouraged by the upbeat Scottish & Newcastle trading statement; S&N frothed up 17.5p to 625p and Bass 33p to 864p.

Alvis, the defence group, rolled 6.5p higher to 182p after agreeing a pounds 300m contract to supply combat vehicles to the Swiss. Delta, where TT group hovers, rose by 4p to 167.5p. Interim figures left Rolls-Royce 8.5p lower at 248.5p.

Telewest Communications, following its cable buy and cash call, fell 10p to 246p; Granada, still seen to be on the verge of mounting a spectacular bid, lost 25p to 571p.

Alfred McAlpine, the builder, firmed 4p to 232.5p, reflecting the 3 per cent interest built up by former bidder, Andrew Goodall.

Builder Bovis rose 15p to 346.5p after Merrill Lynch made positive noises.

Fund manager Johnson Fry firmed to 186.5p with the market growing increasingly convinced that corporate action is not far away. Aberdeen Assets is thought to be interested, but there is now talk of an overseas predator.

Futures Integrated Telephony dialled up a 22p gain to 119.5p after reporting an approach that could lead to a 135p-a-share offer.

BSS, the industrial distributor, rose 12.5p to 547.5p, a 12-month high, after Albert E Sharp said the shares were a buy following the acquisition of PTS.

IFTE, a designer and maker of simulation equipment for training firefighters, hit 114.5p, below the more optimistic hopes. The shares were floated at 100p.

Clipper Ventures, the yacht racing group, moved from Ofex to AIM. But the celebrations were somewhat muted, with the shares opening at 42.5p against a 47.5p closing Ofex price.

SEAQ VOLUME: 1bn

SEAQ TRADES: 75,183

GILTS INDEX: 106.83 -0.03

SCOOT.COM, the old Freepages, will be in profit in 2001, believes stockbroker Kyte Securities. The provider of consumer information ran up a pounds 26.6m loss last year and Kyte sees declining losses in the next two years, with first-time profits emerging at pounds 1.8m.

The shares are popular with small investors; Charles Schwab lists Scoot.Com - up 2p at 49.5p against a 16p low in January - as its fifth most popular buy in the past week.

MERIVALE MOORE, a property tiddler, fell 21.5p to 95p. Although turnover was tiny the fall took the shares to their lowest since April. The price had been buoyed by hopes of a takeover bid from, it was thought, 29 per cent shareholder Warner Estates. But talks, which have been going on for more than six weeks, ended without any deal. Figures next week are likely to show assets of 126p a share.