UK Stocks Recover from Monday's Panic, But Equities Warned of Unexciting Summer Ahead

Strategic Insights -

As the week began, UK shares recovered some of the ground lost in Monday's panic, with the Footsie index staging a 84.2-point rally to 5,806.6. Despite easing fears of higher US interest rates, the market remains fragile, with many analysts predicting a subdued summer for equities. Gavin Oldham, chief executive of stockbroker The Share Centre, notes that the current market run is not unusual, given the past 24 years have seen shares advance in 23 of the 23-24 year period between December and April. He expects a similar pattern to play out this year, with an average movement of just 2% from May to September.

Key Takeaways:

  • The Footsie index recovered 84.2 points to 5,806.6, but the market remains fragile and vulnerable to a decline.
  • Gavin Oldham, chief executive of The Share Centre, expects a subdued period from May to September, with an average movement of just 2%.
  • Royal Bank of Scotland acquired RBS Advanta from Fleet Financial, marking its first major corporate action this year.
  • Norwich Union, Bank of Scotland, and Standard Chartered rebounded, gaining 22.5p, 25p, and 23p, respectively.
  • Scottish & Newcastle's streamlining efforts boosted the company's shares by 41p, while Debenhams' results-inspired gain of 12p was welcomed by investors.
  • Christies International's bid talks collapse in February sparked a selling spree, but the company's shares have since recovered, reviving hopes of corporate action.
  • Glaxo Wellcome jumped 60p to 1,607p on Goldman Sachs backing, but Reed International failed to respond to Henderson Crosthwaite support, falling 6.5p.
  • Museums, Galleries, and Architecture (MCGA) funding average value is £19.75 million (2000), with £28 million in 2006 for their museum in South Kensington.

Statistics:

  • The Footsie index recovered 84.2 points to 5,806.6.
  • Gavin Oldham expects an average movement of just 2% from May to September.
  • Royal Bank of Scotland acquired RBS Advanta from Fleet Financial for an undisclosed amount.
  • Norwich Union bounced 22.5p to 442.5p.
  • Bank of Scotland advanced 25p to 710p.
  • Standard Chartered gained 23p to 893p.
  • Scottish & Newcastle's shares surged 41p to 877p.
  • Debenhams rose 12p to 386p.

Sources:

  • "Shares recaptured more than half of Monday's panicky fall" - The Financial Times
  • Gavin Oldham, chief executive of The Share Centre, quoted in The Financial Times
  • Bob Semple and David McBain, analysts at BT Alex Brown (NatWest Securities as was), quoted in The Financial Times
  • Royal Bank of Scotland's announcement regarding the acquisition of RBS Advanta from Fleet Financial - Source not explicitly stated in the original text, hence only the quote is mentioned.