Market report: Friday close

THE fat-fingered broker has struck again. This time the dealer with 10 thumbs got it wrong in music publisher

Harry Hedge Fund then piled in for at least 8m before the mistake was noticed by the hapless trader, who happened to be working for one of the biggest broking houses in the City.

But the damage had been done by then and the trader was forced to try and cover his exposed position. That drove music publisher EMI 4½p higher to 281¼p, making it the best performer among second-liners as a hefty 29m shares changed hands.

Drinks giant Allied Domecq has become the latest focus of the London stock market rumour mill. Shares in the Stolichnaya vodka and Beefeater gin group went on bid alert and led blue-chips higher with a jump of 22½p to 514½p.

According to reports in the US financial Press, rival French drinks group Pernod Ricard has appointed US investment bank JP Morgan and broker Morgan Stanley to identify potential acquisitions. Allied Domecq is reckoned to be top of their list and is capitalised at around £5.7bn.

Pernod, which owns Glenlivet whisky and Wild Turkey bourbon, joined with Diageo five years ago to buy the spirits operation of Seagram. Analysts say a bid by Pernod for Allied would enable it to expand its distribution network, which would be able to absorb more volume without running up costs.

A plethora of bid approaches and seemingly endless stream of takeover speculation has helped drive up share prices this week. In spite of a lacklustre performance on Wall Street last night, ahead of today's employment numbers, the FTSE 100 index rose 33.2 points to 4941.5.

Shire Pharmaceuticals rose 1p to 636p despite US securities house Morgan Stanley downgrading its earnings forecast for this year and next by 10% because of the higher-than-expected cost of launching its latest drug, Fosrenol.

GUS ended the day unchanged at 968p. Broker UBS has lifted its 12-month target from 1050p to 1125p and repeated its buy recommendation.

Chemicals giant ICI, static at 242p, recovered from an earlier heavy fall after Dutch rival Akzo Nobel came out with poor fourth-quarter numbers. Unilever fell 5¼p to 520p after being cut from hold to reduce by broker ABN Amro ahead of full-year results.

The bus and rail sector has become a 'value trap' following a 45% rally during the past year, says US broker Smith Barney, which has cut its recommendations on the big operators because they have risen far enough. It has downgraded Arriva, up ¼p to 570p, FirstGroup, 8¾p off at 370½p, and National Express, 41½p lower at 895½p, from hold to sell and repeated its sell recommendation on Stagecoach, down 2¼p at 120¾p.

Smith Barney points out that the sector is on a market yield for the first time in six years and a combination of strong earnings, low taxes and positive rail cash balances have generated an illusion of undervaluation against a backdrop of director share sales.

MCC Energy, the mini merchant bank, started on the Alternative Investment Market following a placing of 6m shares by broker KBC Peel Hunt at 50p. The shares opened at 52½p before settling at 55p for the rest of the session.