Market report: Monday close

BRITISH AIRWAYS was the best performer among second-liners today, rising 13p to 227p as it made up some of last week's lost ground which had been prompted by the terrorist attacks in Turkey.

The airline was today bringing England's rugby World Cup heroes back from Sydney on the renamed aircraft Sweet Chariot. At the same time, City institutions were building up their weightings in the stock ahead of next week's quarterly review of Footsie constituents, which seems certain to catapult the national carrier back into the top flight.

The wider market moved to claw back some of last week's losses stemming from the heightened terrorist alert. The FTSE 100 index rose 63.4 points to 4382.4.

Vodafone advanced 5p to a year-high of 136 3/4p as broker UBS repeated its buy recommendation, and rival mmO2 rose 3 3/4p to 72 3/4p on speculation that Japanese mobile phones giant NT Do Co Mo may launch a bid. On Friday, credit rating agency Standard & Poor's raised its rating for mmO2 from BBB minus to BBB.

GlaxoSmithKline confounded market bears when it rallied from an opening fall to trade 6p better at 1373p despite the 'druggernaut's' loss of a year-long battle to stop the sale of cheaper generic versions of its leading antibiotic, Augmentin. The US Court of Appeal ruled in favour of Swiss giant Novartis and its generic company Geneva Pharmaceuticals on Friday, finding that seven of Glaxo's patents for the drug should not have been used to extend protection for it.

Novartis and Geneva launched a cut-price version last year and Augmentin sales have since tumbled more than 60%. Traders were perplexed by the reaction in GSK's share price. They say sellers may have chosen to hold off until after next week's trading update and presentation for the City.

Life sciences specialist Celsis International firmed 1/4p to 34 1/4p despite founding non-executive director Professor Sir Christopher Evans selling 5.3m shares at 31p. He continues to hold 6.6m shares, or almost 6%.

Merrill Lynch remains a big fan of BHP Billiton, up 3 3/4p at 436 1/4, and has raised its 12-month target from 461p to 500p. It also has a buy recommendation on Anglo American, 2p better at 1225p, but is a seller of Xstrata, 4p off at 586 1/2p. Merrill cut its earnings forecast for Xstrata this year by almost 24% to 17.8p a share, reflecting lower profits from coal.

Music publisher EMI added 1 3/4p to 164 3/4p after withdrawing its $1.7bn (£998m) bid for Time Warner's recorded music division in the face of a higher offer from a group of investors led by former Seagram chief Edgar Bronfman Jnr.

Speculators say that EMI may soon be the target of a £1.5bn bid from private equity house Blackstone.

Engineer Invensys shed a further 2p to 17 3/4p. It looks set to run out of cash by June and default on a $1.6bn loan. It has made a series of disposals in the past couple of years, but remains burdened by debts in excess of its current £648m market value.