Market report: Friday close

LONDON shares regained some of their poise in the wake of the Madrid train bombings but there were still signs of nervousness caused by concerns there could be a further terrorist atrocity in a European capital.

The overnight slide in global markets did not help sentiment but, after an opening fall of 70 points, the FTSE 100 closeup 22.2 points higher at at 4467.4, helped by a strong opening on Wall Street.

Travel-related shares were hardest hit by the terror outbreak. British Airways dived 19 1/2p at one stage before closing 4p higher at 288 1/2p as chief executive Rod Eddington admitted: 'All airlines are exposed to external factors.'

Easyjet, at one stage the heaviest FTSE 250 faller with an 18p setback, was up 10p at 323p. Second thoughts did not help Carnival, which dipped 39p to 2436p on worries that American tourists may not be willing to fly to Europe to embark on cruises. First Choice fell 1/2p to 138p.

BP drifted 2 3/4p to 445 3/4p after it emerged it had cut the equivalent of 445m barrels, or 2.5%, of oil and gas from its proved reserves bank last year. BP insisted the move was part of the 'normal practice' of updating its portfolio, but the news comes just two months after rival Shell slashed its own proven reserves by 20%.

Shell, rumoured to be eyeing half of Chelsea Football Club owner Roman Abramovich's stake in Sibneft, fell 3/4p to 373 1/4p.

Challenger tank maker Alvis slipped 1p to 297p as hopes faded that 29% stakeholder BAE Systems would counter a £309m bid from General Dynamics, the US-based maker of Abrams tanks - used extensively in Iraq. The Americans made a 280p a share offer and today profit-takers appeared partly responsible for the fall. BAE moved ahead 7 1/4p to 196 1/4p

Lucky the dog, star of all those Royal & SunAlliance adverts, helped take investors' minds off the £500m it has earmarked for possible compensation for mis-selling, rising 4 1/4p to 93p giving it leadership of the Footsie risers.

Speculation resurfaced a new bid may come for mmO2 following its rejection of a £9.5bn all-share offer from Dutch telecoms operator KPN last month. KPN is still seen willing to return with an offer of between 125p and 140p a share, though Hong Kong's Hutchison Whampoa may stand in the way. Some 126m shares changed hands, but the shares ended the day unchanged at 107p.

Vodafone enjoyed a Cazenove upgrade to buy and the royal broker also moved it back on the core buy list. The shares added 1 3/4p to 133 1/2p.

An analysts' trip to Marks & Spencer's new Life store in Gateshead yesterday left them divided. Leading retail specialist Nick Bubb from Evolution Beeson Gregory believes the group will have to get 'a lot better' if it wants to really challenge John Lewis on big-ticket furniture. Those at JP Morgan were more impressed and M&S remained on their key overweight list with a fair value of 320p. M&S added 1/2p to 283p.

Manchester United slid 1 1/2p after team manager Sir Alex Ferguson revealed he had a pacemaker fitted last week but was now back for training. The shares later recovered to end 3/4p ahead at 264 3/4p.