Market report: Monday close

IS THE great West End commercial property boom coming to an end? Merrill Lynch thinks so and

There appears to be some disagreement over the extent of the setbacks that can be expected, since the shopping boom and an office shortage are still with us. However the West End is still attracting offers with rumours rife of a £146m property deal. Great Portland reflected this, dropping 1/2p to 252p despite having 55% of its portfolio in the West End.

If property, both commercial and domestic, tails off, we are really in trouble, especially as profit warnings increase. A record 135 were issued in the third quarter of the current year ending September, according to Ernst & Young, and the market is convinced that the final quarter will also be packed with them.

Morgan Crucible became the latest victim to be added to the current-quarter statistics, which are confidently expected to set another record. It said earnings would be 'substantially below market expectations' and the shares tumbled 28 1/2p or 14%, to 169 1/2p.

It did not help the market that Boots, down 11p to 611p, is to switch its entire £2.3bn pension fund from equities into bonds. It is a firm indication that pensions holidays are over. If the pension fund managers are not going to buy shares, perhaps the market has come off the bottom too early. London Stock Exchange shares slipped 8 3/4p to 337 1/2p as it was beaten to the punch on Liffe.

Dealers were concerned that the October bounce in share prices may have been premature. Such views were echoed across the Atlantic as the Dow Jones Average opened with a three figure fall. The FTSE 100 index fell 102.7 to 5085.9. All the other indices were in negative mode, with double digit falls dominating.

Output cutbacks proposed by Opec countries fuelled Shell, down 2 1/2p to 529 1/2p. P&O may succumb to a bid and the thought dropped 6 3/4p to the shares at 229 1/2p. Securicor's problems in Northern Ireland, where its has lost £1m in 75 raids so far this year and has threatened to withdraw its security transport services, depressed the shares 2 1/2p to 100 1/2p.

The Pentagon's decision to award the Joint Strike Fighter project to Lockheed will mean a $1bn boost for Rolls-Royce from development work alone. Rolls gained 1/2p to 153 3/4p and BAE Systems added 2 1/2p to 350p, but Smiths Group tumbled 16 1/2p to 678p.

Smaller groups such as Cobham, ahead by 12 1/2p to 1062 1/2p benefitted, but Meggitt dropped 3p to 156p.

Worries about current trading overshadowed reports that Marks & Spencer is finalising talks to sell its nine stores in Spain and its shares fell 10p to 293 1/4p.

Hopes for Xenova Group's cancer trials lifted the shares 6p to 42p, well away from the low of 24p hit earlier this month. Trouble-hit biotech Bioglan Pharma gained 5p or 42% to 17p on hopes that the banks might agree to roll over its debt or that a rival may put in a bid.

AIM-listed Screen added 10p to 72p thanks to contracts worth £1.3m with the Italian carabinieri for video surveillance systems, and with two British fire brigades for its mobile data system.

Prices and indices in this report are from various sources and calculated at different times and may not always match those listed elsewhere on the site.

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