Market report: Friday close

ASTRAZENECA tumbled 29p to 2087p today after analysts at Goldman Sachs and Dresdner Kleinwort Wasserstein laid into the struggling drugs group.

In a note to clients, Goldman expressed strong doubts about future profits from AZ's anti-cholesterol drug Crestor, slashing the company's forecasts for 2007 by 3% and for 2008 by 7%.

'We cut our Crestor estimates based on the results of our proprietary cholesterol drug survey,' said the analysts, who also cited poor pipeline visibility and greater competition on certain key drugs. They conclude AZ's target of a 27% profit margin by 2007 is unattainable.

Meanwhile, Dresdner dropped its target to 1660p from 1900p and repeated its advice to clients to sell. But analysts at Japanese house Nomura believe fears about Crestor are unrealistic and started coverage of the stock today with a buy rating.

Other FTSE pharmaceuticals, GlaxoSmithKline, up 7p at 1262p, and Shire Pharmaceutical, up 10½p at 588p, were not affected.

After three days of falls, leading shares nudged back above 5000 as investors piled into mining and oil stocks but pared gains as the Dow Jones Average opened down 5.3 points at 10,743.5 in New York. London's FTSE 100 index was up 34.75 at 5006.8.

Yesterday's predictions from Saudi Arabia that oil prices would stay at between $40 and $50 for the rest of the year boosted BP, up 12½p at 568p, Shell, 1¼p higher at 484p, and Cairn Energy, up 45p at 1245p and top of the Footsie leaderboard.

Outside the Footsie, Tullow Oil, up 8p at 174½p, and Premier Oil, 20p higher at 600½p, both benefitted. Brokers think oil shares will ride this particular story for some time as investors finally abandon the idea of a $25 barrel - Saudi Arabia's official target since 2000.

JP Morgan provided further support for the heavyweight miners today, upping by 11% its share price target for BHP Billiton, 30½p better at 768p, and Rio Tinto, up 61p at 1827p. Antofagasta climbed 39p to 1370p while Xstrata was 39p stronger at 1084p.

An in-depth report from Investec on J Sainsbury, entitled Hidden Value, made the case for the nation's former favourite grocer, claiming it is fundamentally undervalued. Initiating coverage with a buy recommendation, Investec reckons Sainsbury's, up 1¾p at 287½p, should be able to improve margins through sales momentum.

If Justin King can't deliver, someone else may buy the group and it calculates an asset value of 365p per share.

Fidelity's lack of support for Deutsche Boerse's acquisition of the London Stock Exchange has panicked investors, who until now have shrugged off the grumblings from smaller shareholders. LSE slumped 20p to 535p in reaction to comments from Fidelity, which owns 4.5% of Deutsche Boerse.

A slowdown in profits at Rank's Film division prompted concerns about chief executive Mike Smith's planned demerger/sale of the arm, making Rank, 9¾p lighter at 275p, the worst mid-cap performer. Aim investors turned their attention to the glittery stuff.

Oxus Gold climbed 5¾p to 61¾p after winning back its licence to pan for gold in the Kyrgyz Republic. The new management team has now satisfied various funding requirements.

Celtic Resources, prospecting for gold in Russia, rose 16½p to 424p as speculative investors poured in on the hope a new joint venture will prove lucrative.