Market report: Tuesday close

By THIS IS MONEY
Updated:

 

BRITAIN'S top shares bounced back from a two-day fall with investers encouraged by a batch of robust results.

Drugs and telecoms stocks led the advance, outweighing the drag from the heavyweight oil sector, which knocked 12 points off the FTSE as BP and the oil majors slipped.

Telephone directories company Yell topped the FTSE leaderboard with a 5% jump after it swung to a full-year profit before its flotation costs, while mobile operator mmO2 was actively traded but ended flat after posting a 59% rise in core earnings.

BT Group, which used to own both Yell and mmO2, helped the mood among telecoms as it teamed up with former arch-rival Vodafone to boost its mobile business.

BT shares rose 0.9% to 170 3/4p, bouncing back from a one-year low of 166 1/4p on Monday, helped by news US invester Brandes had bought a 4% stake.

Sage and most technology stocks were lifted by a bounce by their US counterparts, while pubs group Enterprise Inns added 3.2% after saying a strong first-half performance had continued into the second half.

But drinks firm Diageo lost 2.3% after analysts at Merrill Lynch cut earnings forecasts for the company and said there were few upside catalysts on the horizon.

Water and sewerage firm Pennon slipped 2.5% to trim Monday's rally - fuelled by a takeover approach - as dealers said stockbroker Cazenove had cut its rating on the stock to 'hold.

Leisure chain Rank Group shed 4.5% after losing a contract to make and distribute DVDs in Europe, but flooring retailer Topps Tiles and steel firm Corus both bounced strongly as dealers said recent sell-offs had been excessive.

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