Market report: Tuesday 11.30

INSURERS were in the spotlight again today as

The market immediately turned its attention to beleaguered insurer Royal & SunAlliance. With capital reserves depleted by the global setback to share prices, RSA must surely take the plunge and make a similar deeply discounted rights issue. Its shares reflected this with a fall of 1p to 125 1/2p. Prudential headed the Footsie fallers, down 15p at 455p, followed by Aviva, off 14p at 455p.

A late rally on Wall Street cheered the market from the start. The FTSE 100 added 71.7 to 4134.1. British Airways fought to stay in the blue-chip index hours ahead of the meeting of the FTSE 100 constituents committee which will make its decision based on today's closing prices.

The airline hit an 11-year low yesterday and is finely balanced on the edge of expulsion. The stock, one of the main market casualties of the terrorist attacks on 11 September, faces suffering this setback to its status ahead of tomorrow's 9/11 anniversary. It took off with a 1p gain to 132 3/4p, still not sufficient to save it from relegation.

The quarterly FTSE indices review will certainly bring a large number of changes to the various indices. Almost certain to leave the top 100 is EMI, despite a modest rise of 1p to 173p. It has been hit by a series of downgrades and competition worries.

International Power also faces expulsion as its shares remained at a lowly unchanged 109p. Schroders appears to be on the edge again as its shares added 1p to 506p. Sage managed to add 1 1/4p to 116p, helping its survival chances in the Footsie.

Waiting in the wings, engineer Tomkins gained 3/4p to 240p, anxious to make a reappearance. It seems almost certain to gain promotion. Rexam, another candidate for promotion, added 1p to 444p. Alliance UniChem rose 1p to 573p.

Retailers were boosted by the British Retail Consortium's optimism about August sales. They predict sales grew by the fastest annual rate for five months, showing that the High Street shopping boom is continuing.

Dixons added 3 3/4p to 170 3/4p, GUS was up by 1p to 503p, but Kingfisher slipped 3 1/2p to 200p on competition fears.

Doubts about the deal that Corus, the Anglo-Dutch steel group has made in currency-hit Brazil, continued to impact on its shares,

1/2p down to 52p. There are worries about the amount of cash Cadbury Schweppes may have to find to fund a £3 billion joint bid for Hershey, the US chocolate maker famous for its kisses. Its partner in such a deal could be long-time rival Nestlé.

There are some suggestions that the group could turn its attention to another US sweetmaker, Adams, though this has a similar price tag, resurrecting fears about how it can afford such a move. Its shares slipped 1 3/4p to 460 3/4p.

Recruitment companies Robert Walters and PSD Group reported earnings slumps and their shares fell back respectively 5p to 55p and 47 1/2p to 170p.