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Market Report: Confidence in oil soothes interest rate jitters.

Renewed confidence in the price of oil and better than expected UK trade figures helped the market shake off its recent nerves over interest rates, at least temporarily.

The FTSE-100 Index broke back through the 6,000 barrier by lunchtime but another poor opening on Wall Street took the edge of the Footsie gains. Even so, the London blue chip index closed up 55.8 at 5,969.7.

Reassurance from oil producing countries that they would not slacken their production quotas brought some confidence back over the future of oil prices.

BP Amoco and Shell, which between them dominate the FTSE-100 Index, both put on a spurt through the day, though Shell fell back before the close.

BP Amoco closed up 30p at pounds 11.23, while Shell was down a marginal p to 462p.

And recent falls by retailers were reversed as bargain hunters snapped up lower price shares.

Dixons, battered by its exposure to the Internet through Freeserve, gained 69p to pounds 10.54 and Kingfisher put on 27p to 641p.

Freeserve itself also pulled back some of its lost ground - up 2p to 138p.

Fellow Internet company eXchange Holdings reported widening losses, but still dialled up a rise of 6p to 179p.

BT pulled strongly ahead - up 39p to 961p.

The rise came as Securicor unveiled details of its sale of 40 per cent of Cellnet to BT and outlined its prospects as a security and distribution group. Securicor rose 7p to 602p.

Other mobile operators were ahead on the day with Vodafone Airtouch rising 76p to pounds 14.18 and Orange brightening 58p to pounds 11.54.

And Colt Telecom jumped - up 53p to pounds 12.98 - as it announced it was rolling out its telecoms network to key cities in Europe.

Market information group Reuters plunged 15 per cent after a meeting with brokers in New York, which left the market uneasy about the prospects for its computerised share dealing service called Instinet.

The news that three leading investment banks were buying into the Tradepoint electronic share dealing consortium headed by Instinet failed to lift Reuters shares, which closed down 127p to 726p.

The declaration by the US government that it plans to sue leading tobacco companies over the cost of smoking related illness to the public health expense, caused a few jitters.

British American Tobacco slipped 1p to 477p, Gallaher fell 1p to 422p and Imperial Tobacco dropped 43p to 700p, despite its having virtually no exposure to the US market.

Premier Oil surged ahead, gaining 1p to 21p. Oil price hopes played a small part, but the real driver of the jump was a link-up between the UK-based exploration group and US and Far Eastern oil companies.

Pubs and bars business Break for the Border leapt 21 per cent as it emerged a Dublin group was considering a 45p a share bid. Break for the Border shares rose 7p to 43p.

UK smaller company shares edged higher along with the blue chips but with Wall Street sliding at the close, and the corporate newsflow generally negative, the overall mood remained pessimistic. At the close the FTSE Small Cap Index was up 3.7 points at 2,714.8.
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Publication:The Birmingham Post (England)
Date:Sep 24, 1999
Words:536
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