Market report: Thursday close

SHARE prices traded at their highest levels of the year as the FTSE 100 climbed back above 4200. But traders are cautious, saying institutional investors are reluctant to give chase.

In thin trading, the Footsie rose 57.1 points to 4237.8 as the Dow overcame opening falls in New York. One dealer commented: 'Market sentiment remains fragile.'

Mining giant Rio Tinto came under the hammer, falling 8p to 1270p. Deutsche Bank did the damage by repeating its sell rating and lowering its profit estimates by 17% for next year and by 14% for 2005. It retains its 1100p price target.

Oil and gas explorer BG Group firmed 5p to 276p as JP Morgan downgraded from overweight to neutral because it thought it was looking too expensive. BG continues to be viewed as a takeover target for the likes of Shell, up 9 3/4p at 410p, and Morgan says any offer would have to be pitched around 314p.

A two-way pull has developed in drugs giant AstraZeneca, up 67p at 2603p, after its fat-busting drug Crestor was given approval by the US Food and Drug Administration this week. UBS has switched from neutral to buy and lifted its target price from 2850p to 3000p. But HSBC Securities is a seller of the Anglo-Swedish group, and WestLB Panmure and Lehman Brothers reckon the shares are overpriced. AZ is due to give a rundown of its business plan to brokers this evening.

Telecoms supplier Thus attracted fresh support, adding 2 1/4p to 29p in heavy turnover. This included a line of 3.43m shares and a further three million at 28p. At the peak of the telecoms boom the shares were changing hands at 844 1/2p. The loss-making group does not pay a dividend.

Satellite broadcaster BSkyB rose 2 1/2p to 706 1/2p despite the disposal yesterday by two directors of shares worth almost £13m. This came hard on the heels of Tuesday's impressive results and a £1bn deal with the Premier League for television rights. Broker Merrill Lynch has raised the shares from neutral to buy and increased its target price by 10p to 870p. CSFB rates the shares outperform and has upped its price from 820p to 850p.

Dixons rose 3 3/4p to 137 1/2p. A parcel of 20m shares (1%) went through at 136p. Alliance & Leicester fell 5p to 895p as UBS downgraded from buy to neutral and cut its target price from 990p to 940p. The broker prefers Northern Rock, unchanged at 702p, on which it has maintained its neutral rating while raising its target from 680p to 750p.