Market report: Thursday close

AFTER a series of setbacks, drugs giant

Citigroup believes concerns over perceived weakness in the group's all-important drug development pipeline have been overdone, with Glaxo in a better position than its peers.

It claims that, given the 9% fall in the share price this year, investors are essentially getting the benefits of any future blockbuster discoveries by Glaxo's research boffins for free. The note helped push up the shares by 30p to 1196p in another day marked by wafer-thin trading volumes. It was a light day of trading in Marks & Spencer despite the embattled retailer moving toward the top of the Footsie leaderboard with a 4¼p jump to 34&frac;15p.

The FTSE 100 index was just 7 points higher at 4735.2. Traders put the bounbce in M&S down to the surprisingly strong general retail sales figures for November, which also seemed to boost Kingfisher, top 303 3/4p, and Next, 40p higher at 1645p.Today's strong showing came despite growing rumours of a torrid start to the December for many High Street chains and a smattering of downgrades from Seymour Pierce today.

The broker lopped its current-year forecast for Next by £25m to £400m, with analyst Richard Ratner claiming it is possible the past few weeks have been so poor for the retailer that it will be unable to make up lost ground in the all-important final week.

Seymour has also taken the red pen to forecasts for discount retailer Matalan, cutting its current-year profits target from £83.5m to £80m. The shares were up 4p at 222p.

Woolworths was another to be hit, with Ratner taking £10m off his current-year forecast for the pick 'n' mix king. Woolies' shares fell just ¾p to 42&frac;12p.

Steelmaker Corus was among the biggest fallers among blue-chips, sliding 1&frac34p to 51¾p after conceding in a trading statement that global steel demand would likely slow next year. The former British Steel group added, however, that operating profits for this year should be no less than £600m, against £160m for the first half alone.

A separate statement confirmed dissident Russian shareholder Alisher Usmanov still holds a 4% stake in the group, after making £150m from the sale of the bulk of his holding earlier this week.

The heaviest faller was oil explorer Cairn Energy, down 69p to 1362p, ahead of a key update tomorrow on the potential for its huge Mangala field in India.

Elsewhere, Avis Europe tumbled 4¾p to 50¼p after the troubled car rental firm said its final dividend would be scrapped this year.

Punters who dared believe in the much-heralded recovery at Pace Micro Technology were having second thoughts after the TV set-top box maker issued a devastating profits warning.

The shares plunged 18%, or 13½p to 44¼p, as Pace said results for the year to next spring would be hit by a £25m shortfall in sales. Gross margins are also down.