News of the £48bn mega-merger between Chrysler of the US and Germany’sDaimler-Benz sent a ripple of expectation of further consolidation throughtrading floors across Europe today.
But while the move sparked hopes of a further mood of merger-mania amonginternational businesses, it failed to stave off losses on the FTSE 100 index ofleading shares.
The index fell 63.7 points to 5928.7 after sharp falls on Wall Streetand the Asian markets overnight.
The Bank of England’s Monetary Policy Committee today announces its decisionon setting next month’s interest rates. But with the City almost unanimouslybelieving there will be a freeze at current rates, it is unlikely to effectstocks.
Meanwhile, the Far East woes hit Asia linked stocks the hardest. Cable & Wireless fell 23p to 645p, HSBC slumped 35p to £17.95 and StandardChartered fell 19p to 910p.
Banks took no heart from huge improvements in Royal Bank of Scotland’s halfyear results. While RBS gained 18p to 952p, NatWest fell 17p to £11.99, LloydsTSB lost 17p to 882p and Barclays slumped 18p to £17.60.
Last night’s announcement that Serious Fraud Office investigators had swoopedon Powerscreen came as the last in a series of bad reports for investors,leaving the engineering group down 10p to 182p.
Moderate gains in sterling acted as a correction for falls this week, hittingthe exporters who were the chief gainers yesterday.
Lucas Varity fell 6p to 272p, GEC slipped 9p to 511p and British Steelslipped 2p to 167p.
Even British Aerospace, tipped to be involved in future Daimler-inspiredconsolidation of the defence sector, fell 6p to 526p.
News of a takeover bid by an investment group for Jeyes sent shares in thehousehold goods group soaring 54p to 242p.
PA News 07/05/98
