Wall Street’s record close last night started London shares on the up when trading opened today, with the 4700 barrier in their sights.
The New York surge and a brace of decent corporate results pushed the FTSE to an all-time high early on. The index of the top 100 companies hit 4686.3 at one point, but eased back to stand 8.3 points higher at 4677.9 as the market prepared for the Bank ofEngland’s first inflation report since gaining “operational” independence. The Bank is expected to trim its forecast later this morning in the light of last week’s interest rate rise and the strength of sterling.
Yesterday’s market darlings, Guinness and Grand Metropolitan, who announced a £21.6bn merger, slipped back on profit taking. Guinness dropped 13p to 589p, while Grand Met was12p lower at 579p.
One casualty of the strong pound was drinks giant Allied Domecq, whose first half figures were badly dented by currency factors, with the company anticipating a £28m full-year hit.However the sector euphoria surrounding the Guinness/Grand Met deal continued, and the shares were marked up 18p at 464p.
Reduced severe weather costs provided a boost for General Accident as the insurer came in with first quarter figures which were above expectations, but still prompted a small slide. It dropped 5p to 958p.
PA News 14/05/97
