Market report: Monday close

CAR hire operator

American conglomerate Cendant heads the list of likely suitors and may have already begun wooing Avis's biggest shareholder, Belgian company D'Ieteren with 58% of the shares. Brokers acknowledge that D'Ieteren would be the key to any deal over Avis, which has been having a torrid time lately. It plunged £32.4m into the red last year.

Casinos operator Stanley Leisure rose 5¼p to 43¼p on news that Malaysian shareholder Genting had been adding to its holding. It has picked up a further 2.8m shares, stretching its total holding to 19.2m or 14.9%. Genting bought its original stake in Stanley before Government proposals for supercasinos were watered down.

But its persistence in buying the shares suggests it may have other ideas on its agenda. Brokers say Stanley is the most vulnerable of the gambling operators following its profits warning in December, which saw the shares plunge from about 490p.

Share prices generally made useful gains, bursting through the 4960 resistance level noted by the chartists. After thin trading, the FTSE 100 index closed up 38.3 at 4979.8. Next stop 5000? The Dow made a cautious start this afternoon in the wake of Friday's strong gains. It was off 3 points to 10,712.

Dutch broker ABN Amro has raised its recommendation on British Airways from hold to add while lifting its 12-month target to 310p. US broker Smith Barney has repeated its buy rating on BA and raised its share-price sights from 270p to 330p.

Both houses make the point that January's traffic numbers showed strong growth in business and first-class passengers. This has led to improved revenue flow.

Smith Barney has lifted its forecast of operating profits from £483m to £515m and earnings per share prediction from 20.4p to 23.5p. Profit-taking left BA 4½p cheaper at 270p, after the shares briefly touched 278p.

BAA, which operates Heathrow, Gatwick and Edinburgh airports among others, rose ½p to 618p as Smith Barney raised its target from 600p to 700p.

Cigarette maker British American Tobacco celebrated with a rise of 30½p at 973p after a ruling by a federal appeals court in Washington told the US government it cannot receive up to $280bn (£149bn) in past profits as part of its racketeering case against the entire industry.

BAT has big interests in the US through its Brown & Williamson subsidiary. US broker Morgan Stanley was moved to repeat its overweight rating and 1000p target. Rival Goldman Sachs says the company's discount to its sector peers looks increasingly inappropriate.

Chemicals giant ICI was up ½p at 242½p. Broker Merrill Lynch has chosen to downgrade the shares ahead of Thursday's full-year numbers and is warning clients the rising cost of raw materials is likely to erode profits.

Shares in gene therapy firm Oxford BioMedica fell 5½p to 19p as it said deal talks with a mystery suitor had ended, barely two weeks after it told the market it had received an approach about a potential merger.

The company, spun out of Oxford University nine years ago, has developed the TroVax anti-cancer vaccine. Its investors include US-born Russian banking tycoon Boris Jordan.