Market report: Friday close

REGAL Petroleum shareholders finally had something to smile about today as the shares rose 19% on the back of an independent report confirming the company has not over-egged estimates of its Ukrainian reserves.

Any jubilation, however, was tempered by the fact that the scandal-hit firm's shares are down almost 80% since March. In addition, the thorny question of whether Aim-listed Regal will own the Ukrainian gas assets for much longer remains unanswered, after its former chief executive Frank Timis secretly signed a call option that would allow Hong Kong-based Peak Resources to buy the assets, the only profitable part of its business, at the knockdown price of $1.50 a barrel of oil equivalent. Regal, up 1½p at 120½p, is investigating the legality of the agreement.

Helped by a buoyant opening on Wall Street for the Dow, the FTSE 100 advanced up 47.8 at 5161.0, reaching its highest for more than three years, despite a profit warning from French Connection.

The fashion retailer dived 22p to 245p as it slashed profit forecasts amid 'very difficult' trading conditions, although some dealers said the sell-off was not as bad as it might have been because of speculation that chairman and chief executive Stephen Marks, who owns 42% of the firm, may take it private.

Meanwhile, having fallen in early trade, other clothing retailers recovered. Next was up 17p at 1526p, while Marks & Spencer rose 1¼p held steady at 361¾p as it emerged Kevin Stanford, the entrepreneur who set up the Karen Millen chain, has picked up a 0.5% stake in the troubled firm for £29m. Talk that a venture capitalist may be lining up a bid for Woolworths saw the shares tick 1¼p higher to 38¼p.

Woolies' share price has slumped since mid-April, when buyout group Apax Partners withdrew its £837m, 58.2p-a-share offer.

Boots was up 2p at 611p on reports that the health and beauty retailer has reached a £300m sale-and-leaseback deal for 312 smaller stores.

Among the top flight's leaders was Hilton, up 6¼p at 292½p, as reports said it has put up for sale some of its hotels with a view to returning substantial amounts of cash to shareholders.

Publisher Emap soared 17p to 795p on the back of an upgrade from Morgan Stanley to overweight from equal weight. The broker has set a price target of 900p.

Allied Domecq rose 6p to 681p after Pernod Ricard shareholders approved the proposed acquisition of the UK drinks company and US regulators cleared the deal.

Alternative telco Easynet, which provides internet broadband services for businesses and homes, responded to last week's extra deregulation by telecoms watchdog Ofcom with plans to speed up its roll-out. It is moving its kit into another 100 BT exchanges this year, up from 250 today. That will take its services past 5.8m homes and 850,000 businesses.

Faster expansion will cost, meaning this year's losses will be similar to last year, but the group will now become profitable in 2006, a year earlier than expected. The shares gained 5½p to 80p.

Aim-listed miner Eurogold, up 0.5p at 7.5p, has made a 'substantial increase' to the size of the known gold resource at its Saulyak project in Ukraine.

Hardy Underwriting dropped back 12½p to 212½p after the Lloyd's insurer said it had pulled out of takeover talks with rival Omega.