London ReportLondon blue-chips edged into positive territory at the close yesterday as investors sought out defensive tobacco and drinks stocks. The FTSE 100 finished up 0.2 per cent at 4,390.6 while the mid-cap FTSE 250 was down 0.2 per cent at 6,044.3. Volumes were a shade lower than usual, with 3.7 billion shares changing hands.
Traders said in the absence of clear medium-term reasons to buy the UK market, many had opted to sell part of their equity stakes and take the cash, although there had been large buying of FTSE futures into the close.
Dealing was dominated by engineering group Invensys, which had a roller-coaster day as market makers piled into the stock on talk of a rights issue. Nearly 200 million shares changed hands as short-sellers took advantage of the uncertainty.
Traders said some were taking the opportunity to square out of their positions ahead of possible corporate action. The company said it was still exploring a range of financing routes as it finished down 4.9 per cent at 24¼p.
Amvescap, the Anglo-
American fund manager, was up 2.8 per cent to 415p as it gave an optimistic outlook for 2004.
Industrial gases group BOC lost 2.6 per cent to 871p as cautious outlooks from European peers Akzo Nobel and Ciba offset what analysts largely agreed was favourable first-quarter results.
Allied Domecq rose 1.6 per cent to 438p as Cazenove said it expected greater confidence from investors as the drinks group extended its strong run of growth relative to its competitors.
The broker also said that Allied's strong balance sheet and robust cash generation could result in a special dividend or share buy-back from 2005 onwards.
Peer Scottish & Newcastle added 3.4 per cent to 412½p. Imperial Tobacco rose 2.4 per cent to £11.32 as it reported a year of "excellent progress" at its annual general meeting.However, MMO was down 2.1 per cent at 82¾p as traders had a bout of nerves ahead of the mobile network operator's key performance indicators due later today.
Property developers Crest Nicholson rose 10p to 331.7p as the market speculated on a takeover bid following news that property speculator Jack Petchey and property group Heron had both increased their stakes in the company.
News that several directors had bought into the stock raised hopes, although traders said Mr Petchey's motives remained unclear in the absence of any contact with the board of Crest.
