Baghdad advance pushes shares higher

WITH coalition forces reported to be within just 20 miles of Baghdad, the colour blue was splattered across traders' screens. Spirits were raised by a growing belief that the Saddam regime could be toppled.

The FTSE 100 soared 93 points before closing 68.6 points higher at 3753.4, while Wall Street also reflected the overall optimism with an early leap.

Dealers expect a relief rally of more than 10% once the Gulf War is over. Oil prices should weaken further, geopolitical risks will go into retreat, and business and consumer confidence will be resuscitated.

But bears roar that economic reality will then reassert itself and drag the market lower again. Sterling eased to $1.568, while the euro dipped to 68.6p and $1.08.

Media stocks took a turn for the better, believing advertising revenues will pick up once the war is over. Almost 30m shares in Granada changed hands and the close was 6p higher at 66p. Proposed merger partner Carlton Communications jumped 9 3/4p to 100 3/4p after UBS reiterated its bullish stance.

Financial information group Reuters improved 3 1/2p to 107p despite a swingeing downgrade by UBS. It slashed its 12-month target price from 115p to 80p after warning that there is little prospect of revenue growth until 2006 at the earliest. Morgan Stanley increased the pain for Docklands property giant Canary Wharf, 6 3/4p lower at 132 1/2p. The broker reduced its target price from 180p to 130p, warning investors that the property developer is geared to an extremely weak market.

Drugs giant GlaxoSmithKline rose 25p to 1156p on a Williams de Broe recommendation. Rival AstraZeneca gained 49p more to 2265p following favourable results from the first phase III stroke prevention data for Exanta. It compares favourably with dose-adjusted warfarin in preventing strokes.

Looking forward to the end of hostilities in Iraq and an increase in traffic, British Airways advanced 9p to 114 1/2p and easyJet 11 1/2p to 226 1/4p.

Profit-taking following trading statements left Skyepharma 3p cheaper at 45 3/4p. Elliot Bernerd's property developer Chelsfield lost 8p to 218 1/2p after Schroder Salomon Smith Barney downgraded to 'underperform' and cut its target price by 25p to 200p.

Almost 4m shares in transport company Wincanton, 2p better at 143p. Dealers heard whispers about a possible bid from logistics group Exel, 12 1/2p up at 575 1/2p. AIM-listed Dwyka Diamonds sparkled with a gain of 1 3/4p at 8 1/4p after confirming that its merger with Gravity Capital is on track.

Medical Marketing firmed 3/4p to 6p after revealing further progress with a third anti-cancer technology being developed by Oncosense, its whollyowned cancer therapeutic business. Proteome Sciences jumped 9 1/2p to 72 1/2p. It has signed a test deal for BSE with US veterinary giant IDEXX Laboratories.

Information technology hardware group Vislink hardened 1/2p to 14 3/4p after chief executive Ian Scott-Gall and finance director James Trumper bought 40,000 shares apiece at 13 1/2p. It follows recenty sizeable buying by chairman Bob Morton.

Support services group Maclellan put on 3p to 54p following heavy director buying. Chief executive John Foley bought 250,000 shares, while directors Graham Lockyer acquired 50,000 and John Ellis and Stephen Shipley 10,000 apiece.

Dealers expect Monterrico Metals (unchanged at 77 1/2p) to attract buyers after acquiring the 25 of the giant Rio Blanco copper project in Peru that it did not already own. Broker Collins Stewart's target price is 125p. L Gardner Group, now in administrative receivership, says it owes banks over £55m and it is unlikely that shareholders will get anything. The shares, once 292p, are suspended at 5 3/4p.