Market report: Friday close

THE slow recovery in shares hit by the terrorist outrages in Istanbul was led by

Aviva also benefited from a hoped-for link-up with a German bank to form a joint-venture insurance project similar to the one it has with Wells Fargo in the US.

International hotel owners were stronger too, led by Hilton, up 2p to 201 1/2p as broker Morgan Stanley raised its target to 225p from 210p. InterContinental Hotels fell 3 1/4p to 520p on worries about setbacks to tourism.

However, there remained concern over some companies with interests in Turkey. Marks & Spencer fell 5 1/4p to 270p and British Airways was 3p lower at 214p.

Confidence gradually returned to the market despite worries about political instability, and the FTSE 100 index ended up 11p at 4319 points. Business was slow, but volume still topped 1.5bn shares.

Smith & Nephew led the Footsie risers with gain of 8 1/4p at 453 3/4p as Goldman Sachs reiterated its outperform rating after meeting the management two days ago.

Safeway added 1/2p to 286p after the Office of Fair Trading sent supermarket groups at the centre of the bid battle for the store chain a second draft of the undertakings they will have to sign. Sir Ken Morrison of Wm Morrison, if he signs the undertaking, will then have three weeks in which to confirm his bid. It was his original offer of £2.9bn in January that sparked the bidding frenzy.

Those involved in the 11-month battle - Tesco, down 2 1/4p to 238 1/4p, J Sainsbury, up 1p at 301 1/2p, and Asda owner Wal-Mart - also received the documents. Insiders say agreement on a revived Morrison bid could be negotiated with the OFT next week.

Lastminute.com fell 11 1/2p to 237p as the shock of the departure of Martha Lane Fox, darling of the dot com boom, subsided.

BG Group, up 1 1/2p to 274 1/4p, sold its 51% stake in Phoenix Natural Gas for £120m to East Surrey Holdings, down 7 1/2p to 310p. East Surrey also bought US energy firm KeySpan's stake in the business, the total £177.8m deal being funded by a fully underwritten placing and open offer at 300p.

Hopes of an increased offer, or a white knight rescuer for Fusion Oil, disappeared as hostile bidder Sterling Energy revealed it has won the backing of 47.5% of its target's shareholders.

Sterling launched its bid in September, offering three-and-a-half Sterling shares for each Fusion share or a part-cash alternative valuing the oil group at £39.5m.

AIM-listed Fusion slipped 1p to 37p and Sterling was static at 10 3/4p.

The international rise in metal prices, with Chinese demand still strong as manufacturing continues to spearhead its economic surge, initially lifted BHP Billiton but it ended 3 1/4p down at 432 1/2p. Rio Tinto improved 7p to 1373p.

Bristol & West enjoyed a 1p gain to 10 3/4p on the outlook for its property bridging loans business, which provides financing of up to £500,000 for up to 12 months. Engineer Balfour Beatty was steady at to 215 3/4p as it paid £13.3m to buy out two PFI road projects from WS Atkins, up 3p at 424p.