OUTSTANDING performances from a number of leading stocks, most notably the oil majors, Marks and Spencer, Bank of Scotland and Glaxo, helped to rescue the British equity market yesterday.
Without the impetus of those stocks, London would have struggled to stay level, in spite of another strong performance by Wall Street overnight, where the Dow Jones Industrial Average raced higher.
The second line stocks featured three scintillating displays, from British Biotech, Inchcape and British Borneo. But dealers maintained that the market was lacking real upside support and needed another sizeable takeover bid to continue its upward progress.
The FTSE 100 index took a hard look at the 3,800 level very early in the session, but just failed to attract the crucial level of support needed to propel the index above it.
At the close the Footsie had achieved an 11.2 rise at 3,789.4, recouping almost all of Monday's decline, but the day's performance was still viewed as unconvincing by a number of traders.
They were equally scathing about the performance of the Mid 250 index, which closed 6.9 higher at 4,529.2, in a move that owed much to British Biotech, arguably the day's outstanding individual stock.
"Without the drive provided by Marks and Spencer, which helped the rest of the retail sector, and the US support for oil stocks, it would have been a very tough day for London," said a senior market maker.
The 7 per cent gain from Marks and Spencer was worth five points on the index, while the rises in BP and Shell were worth 5.2 Footsie points. Allowing for Enterprise Oil and Lasmo, the leading index owed all of its gains to M&S and oils.
There was no real support for London from yesterday's performance on Wall Street, which lacked a decided trend during the afternoon, as the Federal Reserve Open Market Committee meeting got under way. Dealers said they expected no immediate move in US interest rates but were looking for indications of the direction of the next shift in rates. The Dow was up some eight points well after London closed for business.
A bullish report on its Marimastat anti cancer drug from British Biotech, the leading British biotech stock, saw the company's shares post an early gain of nearly 20 per cent, before they turned down and eventually settled around 10 per cent higher on the day.
Marks and Spencer, meanwhile, provided excellent news from the high street, achieving preliminary results at the top of the range of analysts' forecasts, which helped lift the rest of the retail sector.
Market makers, increasingly nervous about the potential for rights issues, said the short term outlook depended on Wall Street and the Footsie's ability to penetrate 3,800. "If the street performs well and we get through Footsie 3,800, then 3,900 could be on the cards," was the view of one senior trader.
Turnover in equities at 6 p.m. was a lowly 693.2 million shares, with non Footsie stocks accounting for 58 per cent of that figure. Customer trading on Monday was worth £1.85 billion.
