Market report: Thursday close

THE future of debt-laden

The price of the nuclear electricity generator contracted 1 1/2p to 19 1/2p today as it emerged US securities house Goldman Sachs has bought 77.5m shares, lifting its total holding to 103m, or almost 17%. Nearly all the shares have been bought during the past few weeks.

Only last week, it emerged hedge fund Polygon had built up a near-6% stake in BE and was putting pressure on it to abandon the debt-for-equity rescue plan it has agreed with the Government and its creditors. It wants better returns for holders of ordinary shares. Under the current plan, bondholders will end up with

97.5% of the company. The Polygon campaign is reckoned to have received the backing of other big shareholders, including Invesco Perpetual.

British Energy found itself heavily in debt after wholesale electricity prices collapsed. Polygon is arguing prices have risen sharply since the deal was signed and that this provides the firm with more leverage in negotiations.

Share prices generally charged higher, encouraged by a crop of positive interim trading statements from leading companies.

They included ICI, up 24 1/4p at 229 1/2p, mining outfit Rio Tinto, 49p better at 1411p, publisher United Business Media, 36p higher at 501p, and life assurer Legal & General, 1 1/2p better at 98 1/4p. Only BT failed to please, losing 5 1/2p to 189 1/4p.

The FTSE 100 index rose 62.5 to 4418.7 underpinned by fresh gains for the Dow in New York this afternoon.

Smith & Nephew was hit by a wave of bearish news and marked 13 1/2p lower to 546p. Overnight it emerged rival Boston Scientific had been forced to withdraw its medical stents for use in heart surgery. S&N is also a big supplier of stents. Shares of another rival, Zimmer, fell on Wall Street. It was Zimmer that outbid S&N for control of Switzerland's Centerpulse last year.

The shockwaves from yesterday's profits warning by online travel agent Ebookers (down 1/2p at 139 1/2p) continued to be felt in the Square Mile today, with shares of rival Lastminute falling 6p to 140p amid fears that it too is planning to issue a profits warning ahead of next week's interims.

Market newcomer Virgin Mobile rallied 1 3/4p to 190 3/4p, having floated last week at a discounted 200p. Revenue rose almost 24% to £123.6m in the three months to 30 June, while the number of customers in Britain's fifth-biggest mobile phone operator grew by more than 287,000 to 4.25m.

Quarries and rescue vehicles maker Johnston Group surged 170p to 407 1/2p on the back of an agreed £48.3m bid from Ennstone, down 2 3/4p at 32 1/4p. Ennstone is offering 35 new shares and 560p in cash for every four Johnston shares.

A drop in pre-tax profits from £12.2m to £9.5m left Alfred McAlpine nursing a loss of 23 3/4p at 260p.

The construction group has tried to appease shareholders by saying it will be back on track with double-digit growth next year.

Shares in Bob Morton's AIM-listed Harrier were suspended at 16 3/4p while he thrashes out a reverse takeover by the German company Articon-Integralis. The deal will create one of Europe's largest security integrations systems suppliers and will be renamed Harrier-Integralis.