City Watch

Shares slumped early this week amid fears that the Bank of England would leave interest rates untouched. The FTSE 100 index plunged 114.2 points on Monday to 6060.9, though made small gains early on Tuesday. The FTSE 250 index, meanwhile, gained 10 points to 5258.4 on Monday and engineering shares were helped along by a […]

Shares slumped early this week amid fears that the Bank of England would leave interest rates untouched.

The FTSE 100 index plunged 114.2 points on Monday to 6060.9, though made small gains early on Tuesday. The FTSE 250 index, meanwhile, gained 10 points to 5258.4 on Monday and engineering shares were helped along by a survey from the Chartered Institute of Purchasing and Supply (CIPS) suggesting that pressure on manufacturers is easing after recent interest rate cuts.

Big acquisition of the week was GEC’s $2.1 bn purchase of US telecoms and manufacturing group Reltec, which helped GEC gain 18p to 516p.

GKN, meanwhile, was down 5p at 839p ahead of full-year results on Wednesday. Bodycote, however, was a major gainer from the CIPS survey conclusions, up 42.5p at 865p.

Another gainer from improved sentiment was Tomkins, up 4.75p at 231.5p.

Smiths Industries rose for similar reasons and on the back of reports that it is looking for an acquisition in the aerospace sector it closed up 31.5p, a rise of 3.3%, at 978p.

Shares in Mayflower gained just 0.5p to 155p in the wake of better than expected results and a reduction in net debt.

Metals group Billiton, meanwhile, dropped a penny to 134.5p after unveiling a 34% drop in half time profits.

IMI fell 4p to 223.5p.