Market report: Thursday close

POST-budget profit taking, as investors reflected on the Chancellor's measures, left booze makers a little hungover.

Scottish & Newcastle fell 3p to 423 1/2p on the 1p increase in a pint of beer, in spite of an upgrade to hold from sell by Panmure Gordon. Allied Domecq slipped 3 3/4p to 444 1/2p while SABMiller dipped 5p at one stage, before its newly announced joint venture with Castel Group in Algeria and Morocco gave it an 4 1/2p boost to 606p.

However, Imperial Tobacco rose 30p to 1215p as the 9p plus increase on a packet of 20 cigarettes was less severe than expected. Gallaher, which makes B&H-branded fags, added 1 1/2p to 654p.

Housebuilders remained in good heart as the Chancellor endorsed the Barker Report and seemed to hint at a more liberal planning regime. Barratt hit a five-year high 575p, up 4p, as did Bovis with a 14p gain to 565p. The freeze on stamp duty was also a welcome boost and Countryside Properties added 5p at 253p.

Again, many blue-chips went ex-dividend. ICI slipped 5 3/4p to 222p, Rio Tinto fell 34p to 1344p and Standard Chartered dipped 20 1/2p to 920p.

The FTSE 100 index fell 58.90 points to 4397.90. Brewin Dolphin's Mike Lenhoff believes investors will do better with FTSE 250 stocks based on the Chancellor's forecast for economic growth of 3%-3.5% in 2005, and the secondary index rallied 10.7 points to 6219.8.

Recruitment giant Hays led the blue-chip risers with a 3 1/2p gain to 128p as Smith Barney set a target of 125p and upgraded to hold from sell. All those sacked Whitehall pen-pushers will presumably not affect civil servant recruiting.

Financials retreated, led by Lloyds TSB, down 8 1/2p to 410 3/4p, and Royal Bank of Scotland, off 26p to 1677p as profit-takers moved in.

Dresdner Kleinwort Wasserstein is upbeat about the oil sector, having been pessimistic for the past year. It has upgraded Shell to add from hold but the shares were hammered today as it cut a further 500m barrels from its proved reserves and cancelled tomorrow's annual report presentation. The shares shed 11p to 361p.

DKW also raised BP to hold, from reduce, but it fell 5 3/4p to 446 3/4p. Goldman Sachs is more cautious about the sector and reiterated its neutral stance.

Premier Oil raced up 17 1/4p to 543 1/4p after unveiling a 12% surge in underlying pre-tax profits to £81m for 2003 and record output of 36,000 barrels a day for the first two months of 2004. It plans to drill 18 exploration and appraisal wells this year.

MmO2 fell 2 1/4p to 99 1/2p as hopes of Dutch group KPN returning with a higher offer faded and the likelihood of other bidders emerging for the mobile phones group looking less likely. Former mmO2 parent BT lost 1 3/4p to 183 1/4p as CSFB upgraded to neutral from underperform.

Morgan Stanley initiated coverage of Aggregate Industries, up 1p to 84p, by advising investors to be overweight in the building materials group. It has set a 93p target. Thus has been selected as preferred bidder for a £42m contract to upgrade Glasgow City Council's communications network and it added 1/2p to 33 1/2p.

Postman Pat and Little Red Tractor will soon become favourites of Scandinavian children as Entertainment Rights, up 3/4p to 10 3/4p secured TV programme deals. French offspring will enjoy titles such as My Parents Are Aliens and, in Poland, deals will offer tots Barbie of Swan Lake.