Investors defy terror threat

THE threat of further Al Qaeda-backed terrorist attacks on iconic economic targets in the US and Britain, including the New York Stock Exchange, put dealers on the defensive.

But fears it would prompt a heavy sell-off by investors on both sides of the Atlantic proved unfounded. Instead, markets showed commendable resilience, with the Footsie recovering from an early 22-point fall to finish 2.6 points ahead at 4415.7.

Wall Street, helped by better-than-expected quarterly profits from Proctor & Gamble, rallied from 38 down to 28 points up in early dealings.

The volume of business left a lot to be desired though, as worries over a further rise in UK interest rates on Thursday was compounded by data showing UK manufacturing in July storming ahead at its fastest pace in a decade. A

1/4% rise to 4 3/4% looks nailed on, while bears roar it could even be 1/2%.

Oil stocks were friendless despite the crude price rocketing overnight to $43.92 a barrel, its highest level in 21 years. BP cheapened 3 3/4p to 512 1/4p.

Worries that the renewed terrorist threat will make major companies cut down on international travel, and with jet fuel reportedly at a 14-year high, sellers hit British Airways. It was sold down to 220 1/4p before closing 6 1/2p off at 224 1/4p.

Stonking half-year profits from HSBC (26p up at 833 1/2p) and hopes that either the owner of Midland Bank or rival HBOS (15 1/2p off at 697p) will soon counter Santander Central Hispano's £8.1bn bid for Abbey National (14 1/2p better at 581 1/2p), helped heavyweight banks prop up the rest of the market.

Perennial takeover favourite Standard Chartered rose 11 1/2p to 921p ahead of tomorrow's interim results. Royal Bank of Scotland, which report today and could also be interested in Abbey National, gained 13p to 1559p.

Drug-maker Warner Chilcott, the former Galen, jumped 29p to 629p. A US court ruling upheld the validity of the patent on its anti-depressant Sarafem, which Israeli company Teva had sought to make a generic version of. The victory should mean Sarafem is patent-protected until May 2008.

Punters tucked into Alizyme amid revived takeover speculation. The close was 1 1/2p dearer at 158 1/2p on whispers that drugs giant Glaxo-SmithKline (1p easier at 1116p) could be about to swallow the biotech company.

Dealers believe GSK wants to get its hands on Alizyme's ATL-962 obesity drug. Analysts say it is a potential blockbuster. It could be on the market-in Europe by 2007, and in the US and Japan by 2009.

Alizyme has been looking for a joint venture partner to fund both ATL-962 and renzapride - its treatment for irritable bowel syndrome - through their final studies.

Person-to-person online betting exchange Tradingsports Exchange Systems raced a further 13 1/2p ahead to 70 1/2p amid growing speculation that it is the next vehicle for the ubiquitous Terry Ramsden.

Word is the former City whizzkid and racehorse owner will take a stake via a share placing. The stock was only 15p two weeks ago.

Financial PR firm Hansard, which has rocketed since Ramsden acquired a big stake, touched 122 1/2p and closed 1/2p dearer at 116 1/2p.

The acquisition of Griffin Leisure has been agreed. It is a company owned by Ramsden and which has 200 acres of land in Barbados. The group's next purchase will be a rival PR firm.

Buyers chased Leisureplay, Ramsden's other financial vehicle, 7/8p higher to 21 3/4p following the announcement it has made an unsecured convertible loan of £500,000 to The Private Treaty Market at a rate 2% above base rate and payable within two years.

Heavy buying in response to an Evolution recommendation lifted Energy Techniques 1 1/4p to 6 5/8p.

Support services group Harvey Nash jumped 5p to 72 1/2p after forecasting interim profits will be 'substantially ahead of expectations'. Numis says buy and has a target price of 130p.