Market report: Monday close

RUMOURS of a share buyback or even a special dividend circulated the market following Monday's board meeting of Vodafone.

These may be sprats to catch the mackerel of huge write-downs for its controversial £113bn acquisition of Germany's Mannesmann, but they were sufficient to focus attention on its shares and on the telecoms sector in general.

Ahead of Tuesday's results, ABN Amro forecasts £13.3bn of amortisation and no further exceptionals. The consensus on write-offs varies between £10bn and £20bn, which could give Vodafone the biggest loss in UK corporate history.

The shares tumbled from 193 1/4p five months ago to 95 1/4p earlier this month. Since then, despite a rally, they have traded in a narrow range of between 100p and 115p.

Reports that Vodafone is 'relaxed' about Tuesday's figures and that it is also relying on margin improvements at its mobiles business in Japan was not sufficient to allay nervousness and the shares fell back 8p to 105p.

The telecoms sector remained in buoyant mood, mmO2 rallying 1 1/4p to 48 1/2p ahead of its figures on Wednesday and Cable & Wireless ringing up a 7 1/2p gain to 209p. The exception was BT after Dresdner Kleinwort Wasserstein advised taking profits, leaving its shares down 3 1/4p to 283p.

With New York on Memorial Day holiday, there was no guidance from across the Atlantic as Wall Street is closed. The FTSE 100 slipped 32.8 points to 5136.3.

News of the planned arrival Tuesday in London of Castorama boss Jean-Hugues Loyez, on what appears to be a forlorn mission to persuade the institutions to reject Kingfisher's plans to take control of the French DIY business, kept the B&Q owner's shares steady at 365p.

At the beginning of the month, Kingfisher bid £3.2bn to buy the 45% of Castorama it does not own already. It proposed to fund the issue with a deeply discounted rights issue.

Unilever, up 1 1/2p at 634 1/2p, has embarked on a ground-breaking four-year television advertising deal worth £350m with Carlton and Granada. Still suffering from the impact of the ITV Digital crisis, their shares failed to respond, losing 3p to 259p and 2p to 130p respectively ahead of figures due out Tuesday and Thursday.

GlaxoSmithKline closed 1p up at 1472p, after suffering at the hands of the US judges over patent rights for its antibiotics drug Augmentin. AstraZeneca could face similar problems.

A New York court is expected to decide next month whether Prilosec, its ulcer drug that has sales of more than £4bn a year, should lose its patent protection.

US health regulators are also likely to affect its strategy for business life after Prilosec when they decide on allowing it to market its Crestor treatment for lowering cholesterol. AstraZeneca shares slipped 45p to 3080p.

Shire Pharmaceuticals topped the blue-chip fallers, tumbling 26p to 633p as UBS Warburg downgraded to hold from buy. GKN will rejoin the FTSE 100 from Thursday replacing Innogy who have been taken over by RWE. GKN shares added 10 1/2p to 350p.

Signature Restaurants, which owns Belgo and the Italian chain Strada, saw volume soar to more than 1m shares as bid speculation intensified. The shares added 4 1/2p to 53p.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed in the tables. Ofex prices relate to the previous close.

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