Market report: Friday close

A WARNING by retirement homes builder

After cautious comments from builder Wilson Bowden yesterday, and with a further update expected from Persimmon next week, the recent advance in the sector ran out of steam.

McCarthy & Stone, which said long chains were now developing reflecting decreased liquidity in the market, lost 18p to 581p. Persimmon shed 20½p to 679½p and Barratt lost 30½p at 587p. Bellway, 42½p lower at 800p, was hard hit, losing more than 5% of its market value, while Wimpey gave up 17¾p to 403¼p and Wilson Bowden fell 50p to 1110p.

Cairn Energy plunged 247p to 1115p as a drilling report disclosed an unexpected nasty - a big tax levied by the Indian government on the production of crude oil. Cairn disputes its liability but traders said the tax could reduce the net asset value by as much as 250p a share. Merrill Lynch cut its target to 1450p while ABN Amro dropped its target to 1519p.

Had the former fans of the stock who baled out yesterday - Cairn was down 4% - got a whiff of the flavour of the drilling update or were they just lucky? It is a question that the Financial Services Authority might well be asking. The Cairn shock may also serve as a wake-up call to investors who have chased the smaller exploration and production companies up to dizzy heights.

Burren Energy was up 1p lower at 436p while Dana Petroleum was down ½p at 417½p. Tullow was ½p lower at 144½p and Premier added 10p to 550p. Aim-listed Meridian Petroleum, down 3p at 14½p, said its Rodessa reservoir in Texas was unlikely to be commercially viable.

The FTSE 100 gained ground initially but later slipped to 4696.8, a fall of 38.4 points, dragged down by AstraZeneca's shock drug news. On Wall Street, bad test results for Pfizer's arthritis drug Celebrex had the same effect, with the Dow reversing early gains to show a modest fall.

AstraZeneca sank beneath £20 for the first time in 18 months, hitting 1886p, down 170p, as it emerged that trials had shown its lung-cancer treatment Iressa does not prolong patients' lives. Following so closely on the US Food and Drug Administration's refusal to license blood-thinner Exanta, AZ took steps to reassure worried investors by reiterating its earnings per share guidance of about $2.10 for the year.

Merrill Lynch has cut its pre-tax profit estimate for B&Q parent Kingfisher by £20m to £765m for 2005-06. That indicates the slowdown in the housing cycle is biting into B&Q's bottom line. Kingfisher was down 1¼p at 302½p supported by the proposed takeover of Wickes by Travis Perkins, down 27p at 1695p.

Platinum producer Lonmin put on 17p to 914p. The miner said repairs to a smelter at one of its South African mines would cost between $4m (£2.1m) and $6m and that production levels in the half year would fall to 40% of the annual total, but added the full-year quota would not be hit.

Food group Cranswick jumped 37p to 505½p after saying it would issue some 2m new shares at 457p to help finance its purchase of Perkins Chilled Foods. Sausage- maker Cranswick is looking for new investors to take up some of the placing, which will inflate its share capital by about 5%.