MARKET REPORT; Merrill Lynch powers Burmah Castrol into fast lane

Burmah Castrol, the chemical, lubricants and oil group, was propelled into the fast lane by Merrill Lynch, the securities house.

The shares rose 51p to a 1,039p peak in busy trading as Merrill urged its clients to buy. The securities house suggested the shares were worth up to 1,600 on trading grounds with a pounds 20 break-up value.

In a circular headed "Barbarians at the gates of Swindon" - the oil group is based in the Wiltshire town - Merrill suggests profits of pounds 260m last year and pounds 410m in the year 2000.

With Burmah shares riding at a new high it is a far cry from the dark days of the early 1970s when the group was nearly crushed in the pitiless bear market which saw many companies go to the wall.

At one time the share were down to the equivalent of 40p or so. Shortly after Burmah ran into trouble a group of institutions, said to have been led by the Prudential, turned the stock market tide by pumping cash (allegedly pounds 20m) into leading shares.

There was no sign of any concerted institutional buying yesterday. But the market did manage to draw a little belated strength from New York, which during London trading powered to another peak.

After drifting for much of the day the FT-SE 100 index, as if shamed by New York's exuberance, turned what had been a 16 points fall into a 7.9 gain pushing Footsie to 3,716.3.

Worries about the contents of the Scott Report and possible Government resignations were cited for the early unease. Indications that the Germans were kicking their heels over their next interest rate cut was another inhibiting influence.

Media shares settled down after their recent excitement. Pearson again had a volatile session. In early trading the shares were up 17p on anticipation of a bid announcement. The group duly produced a statement but a pounds 377m publishing takeover was not what the speculators expected. The shares ended 7p lower at 683p.

United Newspapers slipped 7p to 645p and its intended partner, MAI, 13p to 435p, still above the bid terms. Carlton Communications, everyone's favourite to spoil the party, gained 12p to 1,034p.

Elsewhere profit warnings took their toll. Nurdin & Peacock, the cash- and-carry group, fell 10p to 148p, and clothing group William Baird 13p to 168p. George Wimpey lost 5p to 135p and Tarmac rose 2.5p to 120.5p. Details of their pounds 600m assets swap contained the inevitable news of lower profits.

Worries Courtaulds Textiles will accompany forthcoming figures with a cautious statement trimmed the shares 10p to 402p.

GKN remained unsettled by the motor industry downturn, falling 8p to 815p. T&N fell 2.5p to 163.5p.

Some of the colour returned to takeover hopefuls. Smith & Nephew rose 5.5p to 192.5p and Bank of Scotland 4p to 289p. But Ladbroke fell 2p to 170p and Standard Chartered 8p to 592p.

P&O was in choppy waters as strikers continued to close the port of Calais; the shares fell 9p to 524p.

Zeneca, the subject of a powerful bear raid on Friday last week, was in the wars again with ABN Amro Hoare Govett apparently telling its clients to sell.

The shares were firm on Thursday following Zeneca's migraine deal with Glaxo Wellcome.

Airtours, the holidays group, had an active session. Carnival, the US operation running holiday cruises, is known to be negotiating to take a near 30 per cent stake.

The market story is that it is prepared to pay up to 520p for the privilege, buying 15 per cent through a tender offer to all shareholders and the rest, presumably 14.9 per cent, through the market.

Tepnel Life Sciences continued its remarkable run ahead of an expected rights issue. The shares surged 16p to 74p. They have doubled this week.

Bruntcliffe Aggregates held at 26p as former directors Anthony Hanson and Paul Kaye again increased their interest and with friends and assuming loan stock conversions have taken their shareholdings to more than 30 per cent.

Games Workshop, the computer games group, fell 6p to 303p as two directors sold shares at around 290p.

Danka Business Systems continued to move ahead following investment presentations; the shares climbed 30p to 700p.

Amstrad, following its confident statement, again moved ahead, up 9p to 210p and bio laggard Proteus International put on 6p to 61p on talk it had solved its funding problems.