Market report: Thursday close

HOPES of a fierce price-boosting auction for condoms-to-footwear group

Boots chairman John McGrath told London's Evening Standard today while the group was looking to expand its Nurofen-to-Strepsils branded products arm by acquisition, he was 'not so enthusiastic' about moving into new product categories. He declined to comment specifically on SSL.

SSL, whose brands include Durex and Scholl, said last week it was in 'preliminary' takeover discussions with an unknown suitor, thought to be Reckitt Benckiser. Hopes that Boots might join the fray had boosted SSL shares as high as 338 1/2p. Today they slipped 1 1/2p to 326p.

Boots was up 6p at 668p, near a 12-month high, as dealers welcomed healthy underlying sales growth for the three months to end-June. Promotions and store refits were paying off, finance director Howard Dodd told analysts, adding the sales improvements were not just down to the sunny weather and later Easter.

Broker E*Trade Securities responded by raising its recommendation on Boots from sell to hold. But some shareholders were not happy. They complained about the group's move to step up its buyback programme yesterday with the purchase of an extra 500,000 shares at 660p just hours before publishing a bullish update. The company defended the move, saying the purchases were not made during a closed period.

Share prices built up a full head of steam on the back of the latest retail sales and betterthan-expected jobless numbers. The FTSE 100 rose 63.10 to 4149.60, supported by a strong open for the Dow in New York.

A big surge in first-half profits and pledges to boost the payout to shareholders at Shell went unrewarded, as it slipped 1/2p to 403 1/2p. Much of the improvement came from a strong performance by its gas division which has sparked fresh talk that the oil giant will soon make a bid for gas explorer BG, up 5 1/2p at 273p.

Some large lines of Securicor went through the market as it rose 6 1/2p to 76 1/2p. They included 3.2m at 73p, 2 million at 73 1/2p and 1 million also at 73 1/2p. Four directors added to their holdings earlier this week.

Britain's biggest insurer, Prudential, is having its nose rubbed in the dirt by smaller rival Legal & General and its surprise dividend rise. L&G shares rose 4 1/2p to 92 3/4p. The Pru, which is expected to slash its dividend by up to 40% next week, rallied 17p at 426p following weakness in recent days. The news from L&G also lifted rivals Aviva 21 1/2p to 489p and Britannic 3p to 247p.

GlaxoSmithKline rose 19p to 1231p on further thoughts of yesterday's trading news. Broker UBS has raised its 12-month target price from 1200p to 1250p, reflecting a useful increase in margins. Rival AstraZeneca leapt 58p to 2508p on better-than-expected half-year profits.

Mining giant BHP Billiton rose 10 1/2p to 366 1/2p following its fourth-quarter production report which showed demand for iron ore remained strong. But some brokers are unimpressed and are urging clients to switch into Rio Tinto, up 24p at 1299p.

A profits warning left computer software group Touchstone 6p lower at 95 1/2p.