Market Report: Profit-taking takes toll as shares give ground

A RIP-ROARING year ended with a whimper as, after a bright start, shares were forced to give ground.

Technical influences again loomed large. But amid speculation of institutions scrambling to cover their positions after coming a cropper in arcane option trading there is no doubt that old-fashioned profit-taking took its toll.

However, selling was largely confined to blue chips. Significantly, the supporting FT-SE 250 index finished with a 4.7-point gain to 3,791.3.

British Aerospace and HSBC, the banking group, continued to lead the stock market's blue chip pack. BAe, selected by SG Warburg as one of its new year shares, rose 4p to 413p; HSBC, again reflecting the heroics of the Hong Kong market, improved 16p to 974p.

Eurotunnel advanced 13p to 610p, still celebrating the 10-year extension to its Channel tunnel concession. Since the deal was announced the shares have climbed 70p. The group is expected to hit shareholders with a pounds 500m cash call in March or April.

And Fisons, another strong performer this week, managed a 2p gain to 134p after touching 136p. Turnover, according to Seaq, nudged 21 million shares in the past three days, with some taking the view that Fisons has got to stage a rapid recovery or fall victim to a predator.

Since Zeneca was split from Imperial Chemical Industries in June there has been speculation it will descend on the wounded Fisons group. Zeneca shaded 1.5p to 840.5p.

Tiphook, another laggard, attracted a little buying, edging forward 2p to 59p. Rank Organisation, tipped by Henderson Crosthwaite as the share for this year, put on 7.5p to 985.5p.

Rothmans International was ruffled by the failure of a proposed merger between two of its Far Eastern subsidiaries, in Singapore and Malaysia.

The suggested deal was voted down by shareholders of the Malaysian operation. The merger had been expected to produce considerable benefits for the Rothmans International parent, which fell 11.5p to 479p.

Asda, the supermarket group, was another to give ground. At one time riding at 58p, the shares ended at 55.5p following the departure for health reasons of retail director Peter Monaghan.

Once again Euro Disney had a dismal session. The shares fell 32p to 346p with further comments from Michael Eisner, chief of the parent Walt Disney group, doing the damage. In an interview with a French magazine he alluded to closing the French theme park. He is quoted as saying: 'If an aircraft's engine gives up on you in mid-flight, what are the options? Everything is possible today, including closure.'

Drink shares had a sober session, with Allied-Lyons off 10p at 680p; Bass 4p at 536p and Guinness 15.5p to 477.5p. But some of the pub groups were in form. Greenalls Group gained 6p to 475p and JD Wetherspoon, which came to market at 160p 14 months ago, was 8p stronger at 361p.

Reuters ended a poor week with another minus sign. The shares fell 13p to 1,787p. US selling has pushed them 77p lower in the past three trading days.

The power generators, stretching to new peaks for much of the Christmas account, continued to fuse on worries about regulatory pressures. National Power fell 7p to 484p and PowerGen 7p to 545p.

A new name appeared on the sedate investment trust pitch. Friends Provident, the insurance group, has produced its first investment trust, a split capital fund. The partly paid units closed at 123p, against a 120p sale price.

Buckingham International, the troubled hotel group where John Clark, former deputy chairman of the JA Devenish pubs spread, is striving to revive its fortunes, firmed 1p to 7.25p. It has sold its nursing homes in a pounds 6.4m deal. Recently it disposed of Portuguese operations for pounds 9.9m.

Two minor oil stocks created ripples. Exploration Co of Louisiana jumped 9p to 37p on the proposed sale of its Chinese exploration interests; Aviva Petroleum rose 6p to 61p, fuelled by revived hopes for its Colombian operations.

But Aminex, the Irish oil stock that has outperformed the rest of the pack on the back of its ambitions to grow in the former Soviet Union, succumbed to profit- taking, down 3p to 76p.

Coal Investments' remarkable run continued, up 1.5p to 39p after touching 41p.

The shares were 29p on Christmas Eve when it became known that the financier Nicholas Berry had lifted his stake to 29 per cent. Malcolm Edwards, a former commercial director of British Coal, is behind the group.

And Europe Energy, a coal miner under new management and expected to expand significantly, put on 1p to 20.5p. The shares were 7.5p earlier this month when the former Keep Investments chief Gerald Davison moved in and announced a pounds 1.8m rights issue.

Whinney Mackey-Lewis, the loss-making architectural practice, jumped 7p to 38p. The entrepreneurial investor Bob Morton has recently been stake-building and there are hopes he will provoke takeover action.

Baillie Gifford Technology, suspended on Thursday at 31p, is expected to announce details of the acquisition of a private group late this month. The deal, thought to involve a cable television business, could be worth pounds 15m.

The FT-SE 100 index, after climbing 16.5 points in early trading, ended 10.4 down at 3,418.4. But the FT-SE 250 index rose 4.7 to 3,791.3. Turnover was 277.5 million shares with 20,172 deals. Government stocks were little changed.

Arcadian International, the old Westminster & County Properties, edged ahead 1p to 38p. The shares could make strong progress this year. The group, run by the hotelier Robert Breare, expanded its hotel portfolio by buying eight properties for pounds 8.5m in November. It also has country club and golf interests. The market expects further leisure acquisitions.