Invensys overtaken by gloom about US

TROUBLED power systems supplier Invensys was a faller in a rising market today, the shares losing 31/4p to 1313/4p after one leading broker started to take an increasingly gloomy view of prospects.

Credit Suisse First Boston has cut its profit forecast for the current year from 871 million to 838 million while reducing earnings from 10.2p to 9.3p.

That compares with the market consensus of about 10.4p.

Word is the broker has made the move to reflect the impact on profits of the slowdown in the US economy.

Orders in May were weak as customers cut back. Worst hit were its electrical components manufacturer Emerson and communications hardware division Perle Systems.

Share prices generally posted modest gains supported by an opening rally for the Dow this afternoon in New York.

City investors are pinning their hopes on the US Federal Reserve signalling another quarter-point cut in rates after the close of business in London tonight. It would be the sixth cut this year designed to revive the American economy. The FTSE 100 index rose 36.4 to 5592.1. Logica eased 21/2p to 8171/2p despite US investment bank JP Morgan issuing a buy recommendation.

It rates the shares a short-term trading buy and has set a target price of 1104p. Great Universal Stores put on 19p at 599p after broker Merrill Lynch said to buy and set a target price of 700p.

Colt Telecom slipped 51/2p to 440p after Goldman Sachs downgraded the shares.

Gallaher gained 14p to 439p after completing the placing of 35.7 million new shares at 420p to raise 150 million. The proceeds will be used to help finance the loans raised for the acquisition of Austria Tabak earlier this month. Laura Ashley hit a new high for the year, rising by 31/4p to 361/2p as a line of 15.35 million shares went through at 32p, followed by a delayed trade of 14 million.

A profits warning from Lambert Howarth left the shares down 431/ 2p at 119p.

Zen Research bumped along the bottom at 311/2p. At least three directors bought more shares in the company only recently, having seen the price slump from a peak of 134p this year.

Cairn Energy, highlighted in Business Day yesterday, continues to rise on the back of its offshore gas find off Andhra Pradesh in eastern India. Tests on the well established a flow rate of 80 million cubic feet per day. The shares responded by rising of 191/2p to 357p, stretching its two-day lead to 42p. CSFB rates them a buy and has raised its target price from 272p to 400p.

Claims Direct shaded 1p to 111/2p as chairman and founder Tony Sullman and fellow director Colin Poole slapped a bid on the table worth 10p a share, valuing the company at 19.4 million. Claims Direct only came to market in July last year, when they valued it at 180p a share and at its height was capitalised at 700 million.

Housebuilder Tay Homes was steady at 97p as Country & Metropolitan, up 6p at 981/2p, snapped up a further 2.9 million shares (11%), bringing its total holding to 26%. C&M wants to win full control of Tay and intends to raise an extra 3 million by issuing further shares.

lPrices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed in the tables. Ofex prices relate to the previous close.

WALL STREET made gains ahead of today's Fed interest-rate decision. The Dow was up 48.91 points at 10,521.39 while the Nasdaq put on 6.2 to 2070.82.

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