Market report: Thursday close

TOO little, too late is the lesson being learned today by shareholders of Footsie newcomer

Chief executive Bill Gammell made all the right noises for the City, emphasising the focus in 2005 remained its oil-rich operations in Rajasthan which have been behind the group's soaring share price during the past year.

But brokers say his efforts will not be enough to save Cairn from dropping out of the top 100 in next month's quarterly reshuffle after just three months in the elite index.

Just a year ago, Cairn was trading around 400p, but news of the big find in India sent the share price soaring to 1570p in November, valuing the company at £2.5bn, and at which point it was granted membership of the most exclusive club in the Square Mile.

But in December the shares collapsed 20% in a day on news of a dry well being struck in the region, forcing analysts to scale back their expectations.

These days Cairn has a price-tag of £1.7bn, less than the £2.6bn rating of plasterboard maker BPB, 5p lighter at 525¾p, which at present levels would take its place as a member of the index. BPB has risen more than 50% from 345p last May. Also facing the drop is packaging specialist Bunzl, up ½p at 473¼p, which endured a lacklustre 2004 and is now capitalised at barely more than £2bn.

Its place could be taken by electricity generator International Power, off 1½p at 174¾p and valued at more than £2.5bn, having seen its shares run up from below 120p last summer.

Share prices generally continued their steady run. Upbeat results from Reed Elsevier, 39¼p ahead to a six-month high 535½p, helped the FTSE 100 index 4.2 points higher to 5057.4, but there was little guidance came from the Dow's lacklustre opening in New York this afternoon, up 2.1 at 10,837.0. Reed's bullish thoughts on the US education market helped Pearson, in the same business, rise 14p to 662p.

Anglo-Dutch steelmaker Corus firmed 1¾p to 61¾p as several large lines of stock went through on the ticker, encouraging brisk trading with one parcel of 4m changing hands at around 60½p.

Standard Chartered drifted 12p to 983p in the wake of yesterday's profits news. Japanese house Nomura says the results were 'inline' but that it now looks fully valued. Deutsche Bank says the shares 'are priced for perfection' and trade at a premium to other UK banks. It continues to rate them a hold.

Barclays, 1½p better at 608p, has been downgraded from hold to sell by broker ING, with its target price cut 7% to 560p following last week's profits news and fears over greater earnings volatility in the future.

Disappointing fourth-quarter sales numbers left B&Q retailer Kingfisher 6¾p lower at 295¾p. Investment bank Credit Suisse First Boston says overall sales growth in the two main divisions 'disappointed', with both B&Q and French division Castorama below estimates.

'The persistent weakness of sales growth at B&Q in 2004-05 suggests that next year will be a decisive one for management action in the face of difficult and demanding conditions,' it added.

CSFB and UBS retain a neutral rating on the stock and both have 320p as their target price.