Bulldog spirit helps fightback

THE City of London was very relieved to get the first anniversary of the tragic events of September 11 over and done with.

Dealing rooms were in sombre mood throughout the session and you could have heard a pin drop when a twominute silence was observed at 1.46pm as a mark of respect for friends and colleagues who had lost their lives.

Thereafter, showing the bulldog spirit and more than a little patriotism, the Footsie retrieved a 46-point deficit to trade 70.9 higher. It closed 35.2 points better at 4210.7.

Wall Street opened 90 minutes later than usual at 4pm UK time following the end of the ceremonies in New York. Fund managers sat on the sidelines until the anniversary passed, and in the first hour the Dow Jones crawled 10 points higher. It was 124 points better an hour later, but then boiled over.

One fund manager said that if markets could get through yesterday without a major incident, heightened risk fears would abate and oversold share prices could stage a further useful recovery.

But bears roared that fears of a US attack on Iraq were bound to exert further downward pressure. Sterling rose to $1.55, with the euro barely changed at 62.8p and 97.35 US cents.

Having escaped relegation from the Footsie by the skin of its teeth, accounting software group Sage jumped 8 1/4p to 130 1/2p.

Management have been making upbeat presentations to analysts and reassured on prospects. Broker Schroder Salomon Smith Barney said Sage reiterated its strong position and its ability to withstand competitive threats from new entrants such as Microsoft.

Mining group Xstrata, which has also kept its Footsie place, jumped 32p to 637p.

Cruise giant P&O Princess steamed 12 1/4p ahead to 432 1/4p ahead of the decision expected soon from US authorities on whether the rival Royal Caribbean and Carnival bids can proceed.

Punters gorged themselves on supermarket chain Safeway amid growing speculation about a hostile bid from US giant Wal-Mart, which already owns Asda.

Safeway touched 225 1/2p before closing 6p better at 219 1/4p on turnover of 22.2m.

Broker WestLB Panmure reiterated its sell recommendation on J Sainsbury (4p off at 330p) ahead of Monday's launch of Nectar, its new loyalty card. Analyst Philip Dorgan says Nectar appears quite impressive, but it is once more a case of 'certain cost' (the £40m marketing campaign), but 'uncertain' benefits. He does not think shoppers will abandon Tesco (3 1/2p dearer at 220 1/2p) to seek Nectar points.

Nervous selling on talk that today's interim figures will be dire left BAE Systems nursing a fall of 12p at a low of 271p. It has nosedived from 384p in June on investor concerns about the Astute submarine, Eurofighter and possible Hawk, Nimrod and Gripen problems.

Following director Sir Tom Farmer's recent purchase of 200,000 shares at 129 1/2p, My Travel, the former Airtours holiday group, gained 6p to 134p.

FTSE 250 Dog Of The Day was Interserve which plummeted 110 1/2p to 232p. The provider of building and construction services painted a gloomy picture about second-half prospects, saying that the slowing economy is curtailing demand. Cautious private sector clients are delaying expenditure.

A shock profits warning knocked the stuffing out of Johnson Services Group, 21p down at 264p. The UK's biggest dry-cleaner stated that fullyear pretax profits will lag analysts' forecasts as its Stalbridge Linen Services unit lost contracts and demand for hired workwear waned.

Aim-listed engineer Torday & Carlisle rose 3p to 29 1/2p. It plans to return £7m cash, or 31p a share, to investors by cancelling 50% of each ordinary shareholder's holding.

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