Engineering shares largely escaped the alarming rollercoaster ride of the FTSE-100 index over the past two weeks.
While share prices of the biggest companies veered up and down by more than a hundred points a day, the FTSE-250 index, containing many of Britain’s leading engineering companies, was relatively stable, thanks partly to renewed talk of re-rating engineering shares.
This sheltered them from the brief panic which drove the 100-share index back below 6000 last week – but most were then left out of the recovery.
TI ran into profit-taking in the middle of this week after a spectacular run that carried its shares from 462.5p to 563.5p in six trading sessions. This reflected relief at news that chairman Sir Christopher Lewinton had called a halt to strategic acquisitions. It was also a response to good half-time results.
It had appeared that a share price equivalent to less than 10 times last year’s earnings had seriously undervalued IMI. But it had a strong run at the start of the week from 263p to 309p, and, unlike TI, escaped the attention of profit-takers when the market dipped.
British Steel also resisted this week’s downward trend in anticipation of an upbeat broker’s circular. But other metal shares were hit hard when it became clear that bids involving the world’s four biggest aluminium companies were not spreading to producers of other metals.