Footsie fillip from upbeat L&G

HEAVYWEIGHT fund manager Legal & General is sticking to its guns and is still optimistic about London stock market prospects for next year. Just the tonic the market needed, as the FTSE 100 ended six successive days of trading losses to bounce back strongly.

L&G's investment chief David Rough and his team say their strategy of building up holdings in equities over the last three months will go on. They anticipate a 2002 year-end Footsie of 6000 to 6200.

There could be a few hiccups, with growing worries about the impact of a slowdown in Euroland and Japan's economic crisis. But traders were in no mood to listen to downside views, pushing the index up 90 points at one stage before it closed 75.3 higher at 5136.3. 'The market is overdue some sort of rally,' said Doug Thomson, at Aberdeen Asset Management, though others believe it is now too late to see any significant recovery.

Banks fuelled the rise, helped by a confident trading statement from Royal Bank of Scotland, 71p higher at 1617p. Barclays gained 40p at 2160p, Lloyds TSB 12 1/2p at 717 1/2p.

Chip designer ARM rose 32 1/2p to 352 3/4p after two leading South Korean producers raised their prices.

GlaxoSmithKline hit a three-month low, down 46p at 1685p, after losing the first round in a battle to protect patents on its best-selling antibiotic Augmentin. Loss of patents is now the biggest threat to established drug groups. AstraZeneca, 13p up at 3060p, is currently defending US rights to its blockbuster ulcer treatment.

Guardian iT crashed from 440p to 175p after the data recovery firm warned it would miss full-year forecasts. Customers have been slashing spending on IT projects. Guardian admitted it had been 'over optimistic' about sales. Floated three years ago at 255p, it peaked at nearly 1700p. The worries hit others in the sector, with ICM Computer losing 35p at 280p, and Sherwood 8p at 127p.

Drinks giant Diageo jumped 22 1/2p to 739 1/2p as Merrill Lynch set a 12-month target price of 900p. It admires the strong brands, which include Johnnie Walker and Smirnoff, and excellent distribution.

Beleaguered Leeds United gained 1/4p at 10 1/2p after a five-year merchandising deal with a sports management-company, aiming to 'globalise' Leeds' name. Hard to imagine Leeds is a popular brand at the moment. Manchester United eased 2 3/4p at 133p.

Entrepreneur Stephen Dean's Aim-quoted Envesta unloaded dotcom and software ventures to focus on Seven Telecom, which offers international phone time. It is close to a deal to supply branded call cards to a leading supermarket. The shares edged up 1/4p at 4 3/4p.

Hard Rock Cafe to gaming group Rank eased 3 1/2p at 218p despite a 'buy' recommendation from Charterhouse Securities. Rank, with bingo clubs, casinos and amusement machines, is poised to benefit from next year's deregulation of gaming.

Celtic Resources gained 1 1/4p at 10 1/2p. Gold reserves at a 50%-owned mine in Russia have risen sharply. Cluff Mining surrendered some gains prompted by encouraging results from its platinum project in South Africa. They closed 7 1/2p off at 226p. Another 2 1/2p was stripped off ZincOx Resources at 94p. It listed at 120p in early December.

Williams de Broë and Deutsche Bank both rate housebuilder Persimmon a 'buy'. It rose 12p to 357p, while upmarket rival Berkeley Homes (520p last month) advanced 17p to 692p.

A warning from Queens Moat Houses hit hotels, already hammered by the 11 September fallout which caused a huge slump in bookings. There are rumours that weaker players may be looking to merge. Thistle Hotels fell 3p at 118p.

Watermark, which supplies hospitality packs and other goodies to airline passengers, has fallen from 104p to 68p since the US attacks. Worth 122p, says broker Beeson Gregory.

Publishing group Huveaux began trading on Aim, closing at 39 1/2p, a 6 1/2p premium. Tobacco equipment manufacturer Molins jumped 18p at 165 1/2p, saying profits for the year just ending will top forecasts. Gallaher, which makes cigarettes, issued a buoyant trading statement, edging up 3 1/2p at 445 1/4p.

Biotech firm Alizyme jumped 8p to 60p after its obesity drug performed well in trials.