Market report: Wednesday close

By MICKEY CLARK FOR MAILONLINE
Updated:

 

DIAGNOSTICS specialist Amersham was among the biggest fallers in the FTSE 100 index today, dropping 26p to 392p after a profits alert from one of its biggest competitors.

The warning came from Applied Biosystems, which downgraded third-quarter earnings forecasts overnight. It said the US government had cut funding for life sciences research in America. Delays to funding had also been identified in Europe and Japan.

Analysts say worries about Amersham, which issued a trading update last month, have been overdone. Brokers Williams de Broë and WestLB Panmure continue to rate the stock a buy.

Share prices had another fickle day. The FTSE 100 index reversed earlier falls to end up 18.1 points at 3765.4. This was despite a long list of ex-dividends, equivalent to a fall of 11 points for the index. Wall Street posted small gains in early trading this afternoon.

Tobacco shares went up in smoke amid concern that the industry may be forced to forfeit profits running into billions of dollars because it ran an 'extensive campaign' over 50 years to deceive customers.

The US Department of Justice wants companies to forfeit up to $289bn (£184bn) of profits when a new case against them comes before the courts next year. There was a big sell-off in shares of Altria, owner of Philip Morris, and RJ Reynolds on Wall Street overnight. That hit British tobacco producers although they later recovered their poise. Gallaher was down 10p at 583 1/2p but Imperial Tobacco rose 10 1/2p to 1020 1/2p and BAT added 5p to 595p.

The Justice Department filed its complaint in January and is accusing the tobacco companies of conspiracy to defraud consumers and failing to warn them of the dangerous and addictive qualities of cigarettes.

The oil price could soon lose much of its war premium, leaving shares of the major oil companies looking less attractive. That was the conclusion of broker Credit Suisse First Boston, which cut its stance on the sector to 20% underweight from 5%. BP, which has again been buying back its own shares this week, shrugged off the change of sentiment with a rise of 1 3/4p to 414 1/4p while Shell firmed 2 1/4p to 382 1/4p.

A rogue trade saw Anglo-Swedish drugs giant AstraZeneca touch 1700p in the first few minutes of trading today before it rallied to be up 76p at 2170p. JJB Sports rose 5 1/2p to 165p on fresh speculative support. The price has come up from about 135p since last week amid claims that founder Dave Whelan is ready to launch a management buyout of the sportswear retailer.

Some say an offer of 220p a share could land on the table before the end of the week. The shares hit a peak of 478 1/2p almost 18 months ago but fell sharply after a 20% profits plunge.

The latest boardroom bust-up at discount fashion retailer Matalan has prompted broker UBS Warburg to downgrade its recommendation from buy to neutral and slash its 12-month target price from 250p to 150p. The shares rallied 12 1/4p to 156 3/4p.

Gowrings fell 6 1/2p to 42 1/2p after the company warned of accounting irregularities that are likely to leave shareholders out of pocket. The group says it is investigating irregularities amounting to £1.6m in its motor division, which it sold last year to concentrate on its Burger King fast food franchise.

• Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.

The Daily Mail's Laurie Laird on yesterday's trade
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