Market report: Thursday close

ON A DAY when many a market forecast fell by the wayside, five top-flight companies racked up aggregate full-year pre-tax profits in excess of £13bn.

That and a firm opening on Wall Street saw the FTSE 100 climb above 5000 - before yesterday, a level not achieved for almost three years - and at one point it reached 5014.80. It was pulled back and finally closed bang on the watermark: 5000.00, a two and a half-year high for the close.

Drugs giant GlaxoSmithKline (up 4p at 1236p) reported 12-month earnings of £6.1bn, followed by banking behemoth Barclays (down ½p to 593½p) with a record £4.6bn. Then came Unilever (down 2p at 514p) with £2bn, ICI (up 29p at 275p) with £397m and Rolls-Royce (down 7p to 264½p) with £345m.

In addition to those five, BT, unmoved at 206p, turned in third-quarter profits of £545m and Scottish Power, ahead 3p at 428p, three-month earnings of £252m.

ICI, Britain's biggest chemicals company beat forecasts and predicted further progress towards its performance targets this year to take top spot among the blue-chip index's risers.

The Footsie, which took the Bank of England's widely expected decision to leave interest rates on hold in its stride, made headway despite the pummelling of Shire Pharmaceuticals, off 64½p at 577½p after Canada's medical authorities forced it to suspend sales there of flagship hyperactivity treatment Adderall XR.

Underpinning market sentiment were increased takeover activity, bumper profits from oil majors and a swathe of share buybacks. With banks gearing up to report results over the coming weeks and more juicy profits expected, investors say further upside could be on the cards, especially if the merger stories keep coming.

Food retailers are the latest to find themselves in the takeover frame, with Icelandic conglomerate Baugur approaching Somerfield with a 190p-a-share cash offer. Following gains of 14% yesterday, Somerfield crept up a further 2½p to 187p.

Oil shares have been doing their bit to fuel the stock-market rally, buoyed by robust prices and bonanza profits. BP extended that trend, adding 6p to 555p, but Shell slipped ¼p to 472p. Small oil stocks, meanwhile, came under pressure. Tullow Oil was off 2¾p at 166½p after what analysts described as a mixed trading statement. Daily oil and gas production for 2004 was up 62% from 2003, following $1bn (£538m) of acquisitions in 2004. Meanwhile, Aberdeen-based Venture Production dropped 7½p to 260p.

But it was not all one-way traffic: the latest addition to Aim's growing band of oil stocks, White Nile, was placed at 10p and first traded at 13p before rising as high as 75p.

Hotels group De Vere has teed up the sale of the Belfry, four times the host venue for golf 's Ryder Cup, to Quinn Group for £186m and plans to return £183min cash to shareholders with a special 159p-per-share dividend. That drove the share price 62½p higher to 563¼p.

JP Morgan has reiterated its outperform rating on consumer products group Reckitt Benckiser - up 10p at 1584p - raising its target to 1700p from 1600p, on the back of solid 2004 results. ABN Amro also applauded a 'high-quality set of figures' in the fourth quarter, raising the stock to add from neutral.

Investec had a punt on Sportingbet, which it rates a strong buy with a 272p target. Shares in the online gambling group soared 10¾p to 283¼p.