Market report: Tuesday close

THE return of corporate activity to London in the form of the £11.7bn bid from Bank of Ireland for

The Footsie climbed through the 4000 mark for the first time in a month, driven by financials and oils. However, the revival in action came too late for Knight Securities, which appears to have finally withdrawn from market-making, having given up on AIM last month.

Abbey National added 67p to 685p and led the financial pack upwards with Royal & SunAlliance ahead 9 1/2p to 106 3/4p and Amvescap rising 40p to 334p.

The FSA reiterated 'that life offices have significant ability to withstand further large falls in equity values', deflecting allegations by Andrew Mohl, chief executive of Australia's AMP, that a dozen or more British life funds have breached UK solvency rules. Aviva added 52 1/2p to 488p, Britannic Group gained 25p to 302 1/2p, Friends Provident went ahead 6p to 118p, Legal & General improved 7p to 108 3/4p and Prudential put on 39p to 452 1/2p.

Footsie-influential oils were also gushing as Lehman Brothers upgraded Shell to overweight, giving its shares a 23 1/2p lift to 422 1/2p. The same broker advanced BP to equal weight from underweight and the shares improved 25p to 448p.

For the first time in weeks, the futures market across the Atlantic was looking good and there was even talk of the near three-year bear market ending as Wall Street opened strongly, reinforcing earlier gains on the Footsie and sending it up 198.70 to 4130.30.

Vodafone is still keen to get control of French mobiles operator SFR and is rumoured to be in talks with Vivendi and BT to buy out their stakes at slightly higher prices. Vodafone added 7p to 101p with BT up 9 1/4p to 180p. Talk of a break-up at Cable & Wireless continued to have an effect as more than 10m shares were traded, sending its price up 8 3/4p to 136 3/4p.

Gossip about a rival bidder for Carlton pushed the shares up 4p to 129 1/2p while Granada gained 5p to 75p.

Confirmation that there may be a management buyout at upmarket estate agent Chesterton gave a 2p lift to its shares at 21p.

The big seller in software group Kewill Systems seems to have gone away and the shares added 1p to 8 3/4p. Inchcape rallied 8p to 660 1/2p despite UBS Warburg downgrading the stock to buy from strong buy. UBS analysts visited the Hong Kong operations and came away with the view that an improvement in profits in that part of the world will not be achieved until 2003.

PowderJect Pharmaceuticals advanced by 2p to 241p following yesterday's gains, prompted by its selling of yellow fever vaccination treatments initially in Holland but eventually throughout Europe.

Engineer Invensys benefited from better figures from competitors in the US and Europe and gained 8p to 64 1/2p. Argonaut Games moved ahead 2p, or 12% to 18 1/2p as the company hit profitability for the first time thanks to its Harry Potter PlayStation games.