Market report: Friday close

THE possible loss of a major contract left business support services group

Capita, which handles the controversial London congestion charge, is currently in talks with Norfolk County Council in an attempt to wriggle out of a six-year contract to run the pay and pensions services for 30,000 council staff and teachers.

When this was signed, Capita described the deal as a model partnership worth an estimated £90m. But Norfolk said in March that it was concerned about the performance of the service and added that it had learned from the experience about how much should be paid in future.

It has been a lean time of late for Capita, which dropped out of the FTSE 100 index at June's quarterly review. Last year it became embroiled in a political row over its handling of a £400m contract with the Criminal Records Bureau. This had put the company in charge of vetting teachers before the new school year. Since then, Capita has pursued 22 bids with a value of £2.4bn, but has failed to secure any.

Share prices put on a late spurt as Wall Street opened strongly. In thin trading, the FTSE 100 nudged ahead 29.3 at 4058.1.

Lloyds TSB stood out with a jump of 10p to 463p. Word is the sale of its New Zealand operations may be near.

Charles Dunstone's Carphone Warehouse fell 5p to 87 1/4p. The bears have been feeling the squeeze of late but they may have started to gain the upper hand again.

GUS firmed 6 3/4p to 693p after broker UBS repeated its buy recommendation and raised its target price from 735p to 795p. But Kingfisher eased 5p to 271p after US broker Smith Barney lowered it from outperform to in-line on valuation grounds. It has repeated its 300p target price. Kingfisher has announced the sale of its French builders' merchant business to Saint-Gobain.

JJB Sports retreated 1 1/2p to 193 1/2p following a trading update showing like-for-like sales down 3.4%. The company's own broker, UBS, has reduced its pre-tax profits forecast for the current year by £5m to £82.5m because of stiff competition.

Broker Credit Suisse First Boston has published a review of the European mobile phones industry. It likes the look of Vodafone, 1/4p better at 117 3/4p, Orange, off 9 1/2p at 519p against a 12-month target price of 552p, and mmO2, off 3/4p at 53 1/4p.

Hotels operator Hilton fell 2 3/4p to 193 1/2p after Merrill Lynch downgraded from buy to neutral because it thinks the shares now look expensive. They have risen by about 45% during the past four months.

Smith & Nephew advanced by 1/4p to 365 1/4p as the odds on it winning control of Centerpulse shortened after Zimmer Holdings said that it would not be drawn into a bidding battle. Goldman Sachs says that Smith & Nephew is poised to make a higher offer.

The world's biggest plumbing supplier, Wolseley, fell a further 15 1/2p to 674p in the wake of yesterday's poor results. US investment bank JP Morgan has moved from underweight to neutral and a 660p price target.

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.