Market Report: New indices start life on the merest trickle

THE Stock Exchange, even if it had tried, could not have picked a more uneventful day to go live with its new range of share indices.

Trading yesterday was down to the merest trickle with New York influences just about keeping the stock market alive.

For the record, the new FT-SE 250 index ended 10.1 points higher at 2,403 and the FT-SE 350 up 7.1 at 1,230.4. The now old fashioned Footsie rose 16 to 2,557.2.

The message of the new threesome was that gains were spread fairly widely, with non-Footsie shares making headway.

But just to devalue the whole exercise, Seaq reported that a little more than 300 million shares were traded which, after allowing for double counting and inter-market trading, indicates that genuine investment business was down to an insignificant 100 million shares. Bargains reached 17,739.

The market was distinctly unimpressed by the Chancellor's latest performance. It would probably have died of boredom if lower interest-rate hopes had not lingered and New York, also on interest-rate considerations, staged a strong opening.

Rank Organisation failed to join the admittedly fragile advance. It fell 14p to 507p. The group's apparent inability to conclude hotel sales and indications it might be prepared to sell its Odeon cinema operations did the damage.

An analysts' meeting called for later this month added to the uncertainty, although sources close to the company indicated that the meetings would not provide any shocks.

Vickers was another casualty. The loss of its pounds 1bn Kuwait tank order left the shares 7p down at 83p.

Standard Chartered, the banking group that advanced last week on takeover talk, retreated 13p to 480p. The rumoured bidder, the Development Bank of Singapore, let it be known it was not stake-building and was apparently not interested in bidding. County NatWest believes the shares are a buy at about 450p. Lloyds Bank managed to shrug off a sell recommendation from Carr Kitcat & Aitken, gaining 4p to 450p.

TSB Group, up 5.5p to 135.5p, reassumed the role of bank bid candidate. A multitude of groups are rumoured to be interested.

Lloyds, following its failure to capture Midland Bank, is one. And some wonder whether Standard Chartered might feel in need of a domestic branch network and consider an offer.

Bass led brewers lower. As the mystery over the departure of the hotels director Peter Sherlock deepened, the shares fell 14p to 548p. Grand Metropolitan lost 10p to 370p. Profit forecasts have been pulled back, largely on the back of the group's US food business, which has been hit by overproduction and a price collapse. There are now fears that profits for the year just ended will be down to pounds 900m against pounds 950m last time.

But Dalgety, the food group, gained 12p to 426p as Barclays de Zoete Wedd made positive noises. Sears, the retailer, put on 3p to 86p following a presentation at Kleinwort Benson. Other meetings are due this week.

Asda, the supermarket chain, rose 1p to 39p. BZW has lifted its profit forecast from pounds 90m to pounds 110m.

Lucas Industries managed a 4p gain to 94p on the maintained dividend, which reinforced takeover hopes. The engineer Glynwed International fell 5p to 225p as Smith New Court cut this year's forecast by pounds 2m to pounds 34m and next by pounds 7m to pounds 38m.

The brewer Gibbs Mew tumbled 16p to 157p following the failure of the Brierley Investments bid. Linton Park, a food producer and plantation group that used to be called Eastern Produce, rose 10p to 140p as a large line of stock was traded between two stockbrokers at 135p.

Ramus Holdings, the tile and furniture group that returned to market last week, fell 10p to 38p. The amusement machines and nursing homes group Kunick, ahead of the cash injection, rose 0.75p to 5p.

Mirror Group Newspapers jumped 7p to 65p. Interim results are due today. About pounds 17m is expected. Some look for a year's out-turn of more than pounds 38m.

Body Shop International, another reporting today, dropped 9p to 161p. An interim fall from pounds 9.2m to pounds 8m is expected. But Lloyds Chemists, expected to produce year's profits of pounds 35m against pounds 19.7m on Thursday, advanced 5p to 222p.

Queens Moat Houses, hard hit on borrowing worries, perked up 2p to 37p as Smith New Court forecast profits of pounds 94m against pounds 90.4m, and said buy. SNC believes the fall, from 92p this year, has been overdone.

Shares, as measured by the FT-SE share index, closed near their best levels - 16 points higher at 2,557.2. But trading volume was pathetically thin. Seaq put turnover at only 305.6 million shares with bargains down to 17,739. The Chancellor's comments pushed long-dated government stocks down by a point.

Crown Communications, the troubled radio group, may have to make a Stock Exchange statement about the problems at its French subsidiairy, RFM. The French courts have appointed a director to run the business, which Crown is trying to sell. French sources say RFM may need a cash injection, which Crown, with debts of pounds 16m, can ill afford. The shares are 6p.

SW Wood Group, being revamped as a printing and publishing business, ignored the departure of a big institutional shareholder. The shares rose 3p to 55p as Henderson Administration said it had sold its remaining interest, 483,859 shares. Wood is headed by Peter James, who helped to build the WSL holidays company before selling to Granada Group.

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