Market report: Tuesday 10.00

THE prospect of

The company may be contemplating joining forces with Russian gas giant Gazprom to launch a £4.5bn bid for Sibneft, the Russian oil company owned by Chelsea FC's Roman Abramovich. The producer is thought to be well within the budget of Shell, which has an estimated war chest of more than £6bn.

A recovery in oil prices to close to $60 a barrel also provided support, while BP advanced 2p to 619p after a robust trading statement.

However, with the FTSE 100 up 7.5 at 5191.8, investors will be waiting for fresh signals from Wall Street, which was closed yesterday for the Independence Day holiday.

A disappointing first-half trading update from George Wimpey saw the shares fall 6p to 450p even though the housebuilder attempted to talk up its prospects in the second half of the year. 'The UK housing market is supported by a strong demand for and undersupply of housing,' it claimed, but it conceded that buyers would 'remain cautious, with prices broadly stable' in the short term.

Other housebuilders fell in sympathy. Persimmon was off 8p at 780p, Barratt was down 5p at 709p and Taylor Woodrow was off 4½p at 340p.

Regus, which provides offices, meeting rooms, virtual offices and network access, rose ¾p to 98¾p as CSFB initiated coverage with an outperform rating and a target price of 130p. Dealers noted that yesterday's volume in the stock, at around 15m, was unusually high and continue to rate the firm as a potential bid target.

Somerfield was steady at 191½p following sharp falls yesterday, triggered by fears that the £1.1bn takeover of the supermarkets company being planned by a consortium could be derailed by a fraud charges against Jon Asgeir Johannesson, president and chief executive of Icelandic conglomerate Bauger, part of the buyout group.

Allied Domecq shareholders have approved its sale to France's Pernod Ricard. The deal has already been given the green light by Pernod shareholders as well as clearance by US regulators. Domecq shares ticked up ½p to 683½p. British Polythene Industries, off 18½p at 393p, continues to feel the pinch from high raw-material costs. Although the group says it has seen a softening in costs, 'this is likely to be only a temporary phenomenon as oil prices remain firm and the floor on petrochemical prices is now much higher than it has been historically'. As a result, it is 'cautious' on its performance in the seasonally quieter second half of the year.

National Express was 3½p lighter at 911½p as Smith Barney reiterated its sell recommendation on the stock, setting a price target of 870p. Aim-listed PolyFuel, which engineers membranes for fuel cells, raising £8m. The shares moved to 50½p from the 51p placing price.

Aim-listed La Tasca, which operates 53 Spanish restaurants, said in its maiden full-year results that turnover in 2004 was up 23% on the year at £39.8m, generating pre-tax profits of £2.4m, up from £1.5m a year earlier. The shares added 2½p to 135½p.

Financial information company Hemscott has surprised itself and the market with a stronger-than-expected first-half trading statement. The shares rose 2½p to 40p.