Market report: Tuesday close

SHARES in car components supplier

For much of this year loss-making Avon has been dogged by talk that a venture capitalist has been giving the company the once-over - even though the City's love affair with venture capital appears to be on the wane. In May the Wiltshire-based company, which supplies Ford, General Motors and Daimler-Chrysler, had all the appeal of a bald tyre after it moved into the red and halved its interim payout to shareholders. Since reaching a peak of 756p in 1997, the shares have been in steady decline, reflecting the downturn in the automotive industry and leaving Avon vulnerable to takeover. It rejected an unwanted bid approach in 1998, when its shares were changing hands at more than 500p.

Any offer pitched now is likely to receive the support of institutional shareholders that include Schroder Asset Management with 8% and Deutsche Asset Management with 6%.

Elsewhere, attention was focused on the prospect of cheaper money. Some said the US Federal Reserve might cut rates by half a point when it met today. The FTSE 100 frittered away a lead of 63.4 points to trade 5 points up at 5214.1 as the Dow Jones opened lower in New York ahead of the Fed meeting.

City punters experienced further turbulence in shares of British Airways, the price touching 165p as the bears rushed to cover their positions following confirmation of interim losses. Joint house broker Merrill Lynch yesterday raised its pre-tax loss forecast for the full year from £65m-to £775m, paving the way for a fresh series of downgrades by other brokers for the cash-strapped national carrier. The price eventually ended 1 1/4p lower at 154p.

Vodafone was heavily traded, 470m shares changing hands ahead of results next week. The price rose 5p to 171 1/2p. One eager punter became caught up in the Harry Potter hype and bid 273p for 2000 Hornby shares. The railway modeller has been commissioned to make 8000 limited editions of the Hogwarts Express, which appears in the movie blockbuster. They are expected to sell like hot cakes. The price rose 11 1/2p to 265p.

The sale of Harry Potter books is continuing to provide a big boost for profits at Bloomsbury Publishing, up 10p at 847 1/2p.

Keep an eye on specialty chemicals group Elementis, up 2p at 42 1/2p, on turnover of 1.08m shares. I hear broker Cazenove has been bidding hard for stock. Could it be that a bid for the company is on the way?

Vanco has become one of only half a dozen companies to make a successful debut on the big board this year following a placing by broker Williams de Broë at 100p. Trading in the telecoms group reached 118p.

Securicor gave back yesterday's gains inspired by a trading buy recommendation from US securities house Goldman Sachs. Today saw rival broker ABN Amro reduce its recommendation on the shares from buy to add following the security fiasco at Chicago's O'Hare Airport at the weekend. The price fell 7p to 111p.

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Today's gainers and fallers

The Daily Mail's Geoff Foster on yesterday's trade