Market report: Thursday close

EMI hit a flat note with investors today as more than £128m was wiped from its stock market value. The shares fell 17 3/4p to 153 3/4p after it emerged that a price war has broken out between the big music publishers in the US.

The world's biggest recording company, Universal Music Group, has slashed the wholesale price of compact discs in the States by as much as 24%. It is feared EMI will have to follow suit. Universal said it has made the move to help revive sales of CDs and tackle the growing problem of illegal downloading on the internet and copying.

It said the average wholesale price of a CD will drop from the equivalent of £7.65 to £5.80 while retail prices will fall from £12 to £8.26.

The news will strike a chord with music lovers but leave the producers with a headache. Brokers say the move will put pressure on margins of other music producers such as EMI. Jonathan Helliwell at broker WestLB Panmure says EMI should trade below 100p. There is too much of a bid premium built into the shares.

Rival Chrysalis rose 6 1/2p to 216p. Director Chris Wright has sold 750,000 shares at 210p, reducing his stake to 44.3m or 26.4%.

Share prices generally came off the boil after yesterday's strong performance that saw them climb to their highest close for almost a year. The FTSE 100 index fell 13.30 to 4248.80 following the Bank of England's decision to leave interest rates unchanged at 3.5%. The Dow opened a touch lower in New York this afternoon.

High Street retailer Next Group rose 13p to 1136p after broker Merrill Lynch moved from neutral to buy and set a target price of 1240p.

LogicaCMG fell 11 3/4p to 245 1/4p. It is raising £260m by way of an unsecured convertible bond. The likes of US securities house Goldman Sachs and Deutsche Bank have been singing the praises of the computer services group following yesterday's better-than-expected interim results. Deutsche has moved from sell to buy and raised its target price from 100p to 300p.

Confirmation of the heavily discounted £960m rights issue from Royal & SunAlliance left it nursing a fall of 19 1/2p to 134 1/2p.

International Power dropped 9p to 137 1/4p, having reported a 32% dive in first-half pretax profits to £96m on the back of collapsed US electricity prices. American chief executive David Crane said: 'Investors should not be surprised to see us invest further in UK power plants.'

He is betting on rising UK electricity prices and was talking days after moving to secure a one-third stake in the giant Drax power station.

Intertek, floated last year, came off recent highs with a fall of 6p to 461 1/2p despite posting a big surge in first-half profits. At the pre-tax level they jumped from £23.3m to £37.2m, enabling the company to pay its first dividend. A big stock overhang was recently cleared.

AIM-listed Highland Gold rose 17 1/2p to 227 1/2p after splashing out £22m for a mine in the Russian Chukotka region. Highland chairman Lord Daresbury said he had a 'wish-list of other mines' in the region, governed by new Chelsea owner Roman Abramovich.

Biotech specialist Cambridge Antibody lost 17p to 528p in response to broker UBS lowering its recommendation from neutral to reduce while repeating its 12-month price target of 440p.