Market report: Tuesday close

THINGS appear to be going from bad to worse for shareholders at

It fell to 92 1/2p, before reducing the deficit to 2 3/4p at 95 1/4p, wiping almost £1.9bn from its price tag of £66.77bn. US securities house Goldman Sachs has dropped the shares from its recommended list, following much speculation on Friday after results from its German and Italian subsidiaries.

Only two years ago, following the acquisition of Germany's Mannesmann, Vodafone was valued at more than £200bn. Traders say the bears have made a lot of money by selling it short during the past year. Brokers such as Collins Stewart have been telling clients the shares will soon hit 77p, although JP Morgan says they are a 'buy' with a target price of 135p.

The gloomy outlook for the telecoms industry worldwide provides the bears with the perfect backdrop to drive the price lower. At the moment, there is little positive news from Vodafone for a sustained rally. Rival Orange fell 15 1/2p to 347p and mm02 eased 1/4p to 44 3/4p.

The rest of the London market slumped to its lowest since February, worried by several days of sharp falls for the Dow as concern grows about the pace of the American economic recovery. Share prices staged a modest rally in early trading on Wall Street this afternoon. The FTSE 100 was off 83.2 at 5119.9.

Discount airline easyJet dropped 35 1/2p to 436p ahead of Wednesday's results. The Luton-based no-frills airline said on Friday that it wanted to bid for rival Go. Analysts say Go could be valued at £300m to £500m. If the talks succeed, the deal will create Europe's largest budget airline with a fleet of 56 aircraft handling about 14m passengers a year. It would also take the enlarged company head-to-head against Ryanair, 11 1/2p off at 371p.

Alliance & Leicester fell 12p to 937p. Broker ABN Amro is again telling clients to reduce their holdings ahead of the annual general meeting. It says the shares are continuing to trade at a significant premium to the rest of the banking sector because of bid speculation.

The dollar's weakness has been good news for the gold price as investors switch and has also driven shares in the big gold producers steadily higher. Anglo American was one of the few top 100 companies making headway with a rise of 34p to 1137p after selling its copper interests in Botswana for $76m (£52m).

PizzaExpress climbed 5 1/2p to 678p after broker UBS Warburg raised its rating from 'hold' to 'buy' with a 750p target price. It has downgraded AB Foods, 4 1/2p off at 618p, from 'buy' to 'hold' while reducing its target price from 630p to 610p.

AIM-listed Brancote Holdings jumped 10p to 207p as buyers snapped up two large parcels totalling 110,000 shares. They went through at 210p - a healthy premium to the ruling price. Rentokil Initial was unchanged at 268p after buying back 6m shares at 269p, and Safeway was again chased higher by the bargain hunters, lifting the price 1 1/4p to 319 1/2p.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.

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