Market report: Monday Close

ITV moved higher today amid reports that US media giant Time Warner, American investment bank Goldman Sachs and British private-equity fund Apax Partners are lining up a joint bid.

The consortium, understood to be fronted by ex-BBC chief Greg Dyke, is reportedly considering a 165p-a-share bid, valuing ITV at about £6.6 billion. The shares added 3¾p to 128½p.

That helped the FTSE 100 move 23.30 points higher to close at 5184.30 but, with US markets closed for the Independence Day holiday, dealers said they were expecting a low-volume day of business.

But the biggest boost came from commodity sellers. Helped by a 7% rise in Smith Barney's target to 650p, BP topped the index, adding 23p to 617p, while Shell advanced 10½p to 563½p.

The gains came after crude surged back above $57 a barrel at the end of last week and, says influential Texan oil analyst Matt Simmons, it may have much further to go - possibly $100. But, while that will support oil stocks, ballooning energy costs continue to darken the market's general mood.

One of the long-term casualties of high fuel costs, British Airways,has rejigged its accounts to get in line with the new IFRS accounting standards. Recognising for the first time on the balance sheet the effects of its big pension scheme deficit sees BA's net assets reduced by £1.3bn to £1.4bn. Dealers fear this will delay the return of dividends, axed in the post-9/11 industry crisis, but, after an early fall, the shares steadied at 266¼p.

Metals and mining stocks were buoyed by a bullish sector review by Smith Barney, prompted by soaring commodity prices.

The broker's favourite blue-chip miners are BHP Billiton, up 15p at 732p, Xstrata, 18p higher at 1107p, Rio Tinto, up 22p at 1746p, and Vedanta Resources, 3p lighter at 500p. Canaccord Capital has also kept its buy rating on BHP, with a 750p target, because of the group's growing exposure to oil prices though the development of its Neptune field in the US.

Towards the other end of the scale, Wm Morrison slid 2¼p to 184½p over fears of strike action at the troubled supermarkets group. Britannic rocketed 126½p to 610p as trading recommenced following the publication of information relating to Resolution's reverse takeover of the troubled insurer.

Aim-listed Surface Technology soared 7p to 17½p on news of multiple orders for Pegasus, its system for micro-machining applications in silicon, a base material for micro-electro-mechanical systems.

JP Morgan has cut its target on publisher Trinity Mirror to 674p from 725p amid sliding advertising revenue at the Daily Mirror. But the broker kept its neutral rating on the stock, 4p weaker at 628p. Smith Barney took similar action, lowering its target to 645p from 675p but retaining its hold status.

Matrix Communications, up 3½p at 174½p, has signed a global framework agreement with Vodafone under which it will supply internet and WAP content control technology to the mobile telecoms giant.

UK oil explorers Paladin Resources, up 8½p at 236½p, and Dana Petroleum, 8p better at 680p, have received approval from the UK and Norwegian governments to develop the North Sea's Enoch field. Real-time traffic information provider Trafficmaster, up 3p at 46p, has sewn up a threeyear deal with Volkswagen UK to supply information to satellite navigation systems fitted to Audis.