Market report: Friday close

THE onset of triple-witching injected a welcome shot of energy into the FTSE 100 index, which closed at 5077.6, up 32.6 points. The index came off an earlier three-year high of 5,098.5 as investors decided to book some gains ahead of the weekend.

As options, index options and futures contracts expired, prices picked up leading to speculation that at least one of the big futures houses had taken out a hefty position on the index.

But the expected readjustment did not follow, suggesting the market is increasingly comfortable with the higher trading level. Wall Street also opened strongly this afternoon, with the Dow last up 40.7 points at 10,619.3.

However, there were plenty of knock-backs for individual companies, starting with Allied Domecq. It dropped 12p to 680p after US-based Constellation Brands pulled out of the race to buy the drinks giant, leaving Pernod Ricard to pursue its planned takeover in peace.

Constellation, the world's biggest wine group, was mulling a joint bid with fellow American Brown-Forman but decided the post- merger hangover would leave them unable to create 'sufficient value.' In Paris, Pernod shares soared as investors celebrated the fact the French drinks giant will not have to raise its £7.5bn offer.

A terse response from UK Coal to public declarations by dogged venture capitalist Jon Moulton dashed investor hopes of an imminent takeover. Its shares rose ½p to 138p. Moulton said earlier this week his initial approach, together with Sir Tom Farmer's Morston Assets and the Duke of Buccleuch, had been rebuffed but signalled his continued interest with a request for a meeting with management.

UK Coal today said it had 'no reason to believe the approach will lead to a deliverable offer on terms acceptable to shareholders'. It called Moulton's approach 'highly preliminary and tentative' and complained that 'despite repeatedly seeking clarification of material aspects of the approach, satisfactory responses have either not been forthcoming or have been forthcoming without sufficient clarity to address the board's concerns'. Analysts say Moulton needs to offer between 180p and 200p to win over the board.

Shell and BP benefited-from record oil prices with the former rising 10&frac12p to 516&frac12p and the latter 9p to 586½p. With producers' cartel Opec almost at full capacity and Chinese demand not slowing, there may be further price increases in crude over the summer.

There was strong support for the smaller oil groups too, with Paladin Resources, up 16p at 230p, topping the FTSE 250 climbers while Dana Petroleum was 27p higher at 643p and Premier Oil added 39p to 709p.

Soaring prices only deepened despair at independent explorer First Calgary, down 20p to 372½p following the collapse of joint-venture talks with Spain's Repsol. If First Calgary could get the stuff out of the ground it would be laughing all the way to the bank hence its new-found determination to develop its promising Algerian oil and gas fields by itself.

Plumbing and heating pipes giant Wolseley was near the top of the FTSE 100 leaderboard with a 24p jump to 1162p on the back of positive news from American housebuilder KB Homes. More than half of Wolseley's sales are in the US.

Yell dropped 6¼p to 429¼p as it emerged chief executive John Condron and finance director John Davis had offloaded onem and 500,000 shares respectively at 434p.