Market report: Monday close

By MICKEY CLARK FOR MAILONLINE
Updated:

 

This could be crunch week for Charles Dunstone's Carphone Warehouse, which was trading at a hefty discount to July's flotation price of 200p. Almost 10,500 private shareholders will soon be free either to sell their shares in the mobile phone retailer or stick with them in the hope of recouping their losses.

But the signs do not look good. Judging by last week's volatile performance, investors remain bearish about the outlook for the market as a whole.

Today shares in Carphone Warehouse were changing hands 4p cheaper at 166 1/2p. Unlike private punters, who had to agree to be locked in for three months, the City institutions were free to bail out on day one - and many did.

Brokers were quick to point out today that the shares would have fallen even further had it not been for the support given by the big index tracker funds. They had been forced to support the issue after it was catapulted straight into the FTSE 250 index.

Sales of mobile phones may be booming, but competition is growing and demand for the new generation of WAP phones has been disappointing.

The rest of the London market was able to extend Friday's rally with the help of an opening gain for the Dow Jones in New York this afternoon, while Nasdaq opened lower. The FTSE 100 index at the close was up 76.1 at 6285.7. But brokers remain cautious about the short-term outlook. Tension in the Middle East, rising oil prices and a steady stream of profit warnings from blue-chip companies in the US continue to undermine sentiment.

Allied Zurich rose 21 1/2p to 791 1/2p on the last day of trading, as broker UBS Warburg waded into the market picking up stock following the proposed $650m (£450m) acquisition of its shares by parent company Zurich Financial at 700p.

Vodafone, which accounted for a large slice of Friday's much-needed rally by the London market, extended its run with a rise of 5p to 262 3/4p. Cable & Wireless rose 2p to 892p, ignoring the move by Lehman Brothers to reduce its break-up value on the shares from 1360p to 1030p and the rating from market perform to neutral.

Supermarkets giant Tesco stood out with a rise of 10 3/4p to 259 1/2p after Deutsche Bank moved to increase its target price for the shares from 250p to 280p on the back of a visit to Tesco's stores in Thailand and South Korea. Deutsche has also raised its pre-tax profits forecast for 2002 by £5m to £1.17bn.

US securities house Lehman Brothers has been looking at biotech companies to assess which may succeed. It backs Cambridge Antibody, up 12 1/2p to 3462 1/2p, Celltech, 38p dearer at 1333p, Shire Pharmaceuticals, 46p better at 1326p, Oxford Biomedica, 6 1/2p higher at 73p, and PPL Therapeutic, 2 1/2p firmer at 187 1/2p, followed by Bookham Technology, up 233p to 2541p, Energis, up 22 1/2p to 444 1/2p, and EMI Group, up 20p to 510p.

And in New York...Wall Street opened firm while keeping a wary eye on the Middle East peace summit. The Dow was up 48.47 at 10,240.65 while the Nasdaq dipped 11.10 to 3305.67.

•Prices 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.

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