Optimism on Wall Street helps to disperse the cloud

The Americans, once again, came to the rescue of a harassed stock market. For much of the day shares remained under the influence of the Tory leadership crisis. Then New York opened on a confident note and just a little brightness filtered into the proceedings.

The FT-SE 100 index, at one time down almost 16 points and below 3, 300 for the first time for more than a month, rallied to manage a 4-point gain to 3,313.2 at the close.

It was, however, a limp session, with the Major/Redwood confrontation ensuring nerves remained stretched and keeping genuine investment activity at a low ebb.

The market's obvious fragility could lead to further violent swings as the leadership contests unfolds. There are fears the Bank of England could be tempted to prop up sterling by lifting interest rates. But more US economic data, pointing to lower transatlantic rates, could take some of the pressure off the pound. It was the scent of lower rates that galvanised New York into activity.

Among leading equities, Sears, the retailing group, spread trading gloom. A downbeat shareholders' meeting left the shares 3p down at 97.5p in heavy trading. Other retailers were pulled lower in sympathy.

Argyll Group, with the market alighting on its defensive qualities at times of unrest, was the best-performing blue chip, up 9p at 323p.

British Airways, on European buying, rose 6.5p to 405p. TSB, the banking group, and Thorn EMI were supported on the theory that if corporate action is being prepared they fell too far in Monday's rout.

Amstrad, the electronics group run by Alan Sugar, climbed 9p to a peak of 246p. The shares have enjoyed a new lease of life since a five-for- one consolidation in November.

Their strength has been powered by a determined drive into cellular telephones. It has become one of the world's largest makers.

Amstrad has also repositioned its computer operations, withdrawing from the cut-price high street and moving into direct sales through the pounds 60m acquisition of Viglen.

Last week the market took further encouragement from the decision of Viglen's vendors to take part of their consideration in Amstrad shares, based on 219.5p, a level near the then ruling price.

Shell, the only blue-chip hero of Monday's retreat, put on another 5p to 758p, with James Capel apparently upgrading.

Rank Organisation edged ahead 2p to 415p ahead of a trading statement, due tomorrow; Brent Walker lost another 0.25p to 2p on litigation worries.

Union, the financial group, lost 4p to 91p. Some had expected the Cater Allen discount group to accompany its results with a Union bid.

Williams Holdings continued to attract profit downgradings, with Robert Fleming taking the stock off its buy list.

ABN Amro Hoare Govett left the Dalgety food group a shade lower at 445p by lowering its estimates by pounds 6m to pounds 130m and pounds 4m to pounds 156m.

Glynwed International, the engineer, had to contend with sell advice from Societe Generale Strauss Turnbull. The shares shaded 2p to 338p.

The Fisons takeover soap opera refused to die, with Medeva edging ahead 2p to 252p and Fisons jumping 5.5p to 201.5p.

Tamaris attracted the day's biggest turnover, with Seaq printing volume at more than 45 million. There appeared to be some chunky lines on offer at 1.25p, with most picked up at 1.75p. The nursing homes operator, up 0.25p at 2.25p, produced profits of pounds 322,000 against a pounds 111,000 loss.

Orbis, once called Hilclare, returned to market at 26p against a 23p suspension price. The halt was called for the acquisition of Galequest, which provides closed-circuit security systems. The takeover cost pounds 5.6m.

Hornby, the toy maker, added 5p to 125p. The market is intrigued by recent modest stake-building. Assets are thought to be much higher than the group's pounds 10m market valuation.

The highly-rated pub group JD Wetherspoon dipped 8p to 544p as James Capel said sell and Security Services lost 7p to 918p with Robert Fleming putting out sell advice.

The insurance broker Lowndes Lambert improved 7.5p to 161.5p on its 16 per cent profits increase.

Storm, the cartoon and merchandising group, slipped to 8.5p. It adopted a new name, Caspian. The switch followed April's acquisition of three media companies owned by the new chairman, Richard Thompson, a member of one of the families that founded Hillsdown Holdings. Mr Thompson owns Queens Park Rangers.

AIM welcomed its first newcomers since last week's timid launch. They included Winchester MultiMedia, raising pounds 3.1m through a share sale at 100p. The opening price was 90p.

TAKING STOCK

o Lloyds Chemists could soon feature in corporate action. There are suggestions it would welcome a friendly get-together. The group has had a difficult time, with a wide-ranging reorganisation expected to hit year's profits. They are likely to fall from pounds 55.5m to around pounds 42m. This month Lloyds was driven into management changes when its chief executive, Peter Lloyd, whose brother Allen is chairman, resigned because of ill- health. The shares fell 3p to 211p. They touched 305p earlier this year.

o Hunters Armley, the commercial printer, slipped 5p to 155p. Interim profits of pounds 1.6m have prompted year's estimates to be lifted from pounds 3.2m to pounds 4.4m. The company, which has picked up a series of new contracts, is holding investment meetings in Edinburgh and Glasgow today.