Market report: Tuesday close

By MICKEY CLARK FOR MAILONLINE
Updated:

 

SHARES in cash-strapped Eurotunnel came under fresh selling pressure in London and Paris today. They fell 3 3/4p, or almost 11%, to 31p amid mounting speculation that the consortium of British and French banks that backed the venture may be about to seize power.

The talk follows last week's shareholder coup in Paris, which saw the entire Eurotunnel board ousted. The Anglo-French group still has debts of more than £6bn, which it is due to start paying back in 2007. The banks are growing impatient waiting for the new board to come up with a strategy for the group.

Hopes that the French and British governments will step in to stop the banks grabbing control appear wide of the mark. On the contrary, City sources say both governments are likely to welcome such a move. Pressure is also mounting for the credit agencies to downgrade Eurotunnel debt, making it even more expensive.

Share prices generally were marked higher as investors trickled back from the Easter break and Wall Street opened higher. The FTSE 100 index closed 26.1 points higher at 4515.8.

Oil giant BP advanced 8p to 490 1/4p after agreeing to sell its one-third stake in Singapore Refining to Singapore Petroleum and Caltex Singapore for $70m (£38m). In a separate move, US securities house Goldman Sachs has raised its target price for BP to 530p to reflect the strengthening oil price and rival Shell's loss of form. Shell rose 8 1/2p to 378p in line with the rest of the market.

Dana Petroleum was up 2 1/2p at 276 1/2p after starting its Indonesian appraisal drilling programme, numbers. Finlay Thomson at broker ABN Amro says: 'Dana flagged both wells at recent results, so news was expected. They could add between 20p and 25p to the net asset value of the shares.' He has repeated a buy rating and 300p target price on the shares.

Airports operator BAA rose 6p to 533p on March passenger numbers. Broker Merrill Lynch has repeated its buy recommendation. That spilled over into British Airways, up 7 1/2p at 299 3/4p.

EMI rallied after an early fall to trade 2 1/4p better at 267p after the music publisher angrily rebuffed accusations that it had been involved in the manipulation of chart sales in the US.

The reports circulating over the weekend are linked to EMI's decision to sue rival Avatar Records for non-payment of revenues due. EMI insists that Avatar has never alleged the company was involved in any scam and blames the behaviour of certain marketing agencies for the problem.

ICI firmed 1 1/4p to 230 1/4p, cheered by indications of a pick-up for paint products from US rival Sherwin-Williams, which has raised first-quarter earnings forecasts. Associated British Foods fell 3p to 620 1/2p ahead of interim results tomorrow. Broker UBS retains a neutral rating but has fallen into line and raised its target price from 600p to 625p.

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