Market report: Monday close

By MICKEY CLARK FOR MAILONLINE
Updated:

 

THE London stock market set about clawing back some of its recent losses at the start of what promises to be an important week for City investors.

On Wednesday, Chancellor Gordon Brown makes his last Budget speech before the General Election. Also on Wednesday, the Footsie steering committee meets for its quarterly review to decide which companies lose their positions as constituents of the top 100 list and which ones replace them. Finally, on Thursday, the Bank of England's monetary policy committee votes on whether to cut interest rates again.

So it seems likely the big institutions will remain cautious and avoid committing fresh funds to the market place. Even so, the FTSE 100 index made good progress, finishing up 72.7 at 5931.1, cheered by a firm opening for the Dow Jones in New York and the hi-tech Nasdaq market. Sentiment was also supported by a rally for the Nikkei 225 Average in Tokyo, although prices closed below their best. The bears still retain the upper hand in London but may soon begin covering their positions during the next few days.

Vodafone contributed to a large part of the gain with a rise of 7 3/4p to 189 3/4p. The EU is expected to approve the acquisition of Eircell any day.

British Airways took off with a rise of 7 1/2p to 359p, despite news of a 7.7% drop in traffic numbers. Earlier in the day investors had been excited by reports that KLM had made a £100m offer for its short-haul airline business Go. But the Dutch national airline later said it had not made a formal offer.

Abbey National fell 4p to 1156p following reports claiming that merger talks with Bank of Scotland, down 6p at 754p, may be back on again. They broke off discussions last week, blaming uncertainty created by the rival bid from Lloyds TSB, 1/2p better at 652p, which has been referred to the Competition Commission.

Among companies facing the chop from the top 100 are Autonomy, which rose 62p to 1252p, Electrocomponents, 20p better at 680p, and Capita, 8 1/2p up at 475 1/2p. Jostling to replace them are Scottish & Newcastle, up 6p at 538p, Enterprise Oil, 3p higher at 628p, Whitbread, 2 1/2p lighter at 625 1/2p, and Smith & Nephew, 5p easier at 324p.

Results from Pearson, 64p down at 1497p, focused attention on rivals Carlton Communications, 8p better at 512p, and Granada, 2 3/4p lighter at 194 1/2p. Broker Credit Suisse First Boston rates Granada and Carlton as buys, setting target prices of 612p and 250p respectively. Rival HSBC Securities has cut Carlton from add to hold and slashed its target price from 670p to 540p, while retaining an add rating on Granada and trimming its target price by 10p to 210p.

British Energy, down 18 1/2p at 272p, was sent reeling by a downgrading from US securities house Goldman Sachs, which has moved from market perform to market underperform. It gives a fair price valuation of 240p on the shares. Freeserve was a casualty, dropping 2p to 97p.

• 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.

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