Market report: Tuesday close

THE £2.4bn disposal of

A clutch of big brokers have come out with some bearish comments on the brewer. UBS has downgraded from buy to neutral and slashed its target from 450p to 380p, saying it lacks a catalyst ahead of interims in December.

US securities house Goldman Sachs has repeated its underperform rating and cut its 2004 earnings forecast from 39p to 29p a share, and the estimate for 2005 from 43p to 32p. It warns that the disposal leaves the brewing business on a valuation that is too high compared with European rivals. The dividend is being financed out of debt, Goldman adds.

Lehman Brothers is reputed to have lowered its target to 340p compared with today's price of 347p, down 9p.

Share prices generally continued to drift in thin trading as investors fretted over the worsening situation in the Middle East. The FTSE 100 index rose 1.9 points to 4272.0.

The ITV merger twins extended this week's gains after the Government's all-clear for the deal. Granada firmed 9 1/4p to 112 1/4p on turnover of 160m, while Carlton Communications was 23 1/2p better at 205p as 75m shares were traded. Broker Numis is pleased the £4.2bn merger can go ahead, creating one big ITV franchise. It has raised its target for Granada from 117p to 132p, which implies a 240p target for Carlton.

Yet another dramatic twist was recorded in the tale of Manchester United after Rupert Murdoch's BSkyB sold its entire 9.9% stake in the Premier League side.

In the first trade of the day in the stock, Goldman Sachs paid 239p (£62m) for the 25.95m shares. It sold them on to Irish shareholders JP McManus and John Magnier, stretching their joint stake to about 23%. They also traded 4.5m more shares in the marketplace this afternoon.

It took half an hour for traders to start making a price in United this morning, after which it rose 12 3/4p to a three-year high of 247 3/4p on turnover of 35m, indicating that a full bid was on the cards. Malcolm Glazer, owner of the NFL's Tampa Bay Buccaneers, last week doubled his stake to almost 6% and several other large parcels of shares changed hands. Hedge fund Lansdowne sold 2.2m shares yesterday.

BT rose 3p to 188 1/4p as more than 114m shares changed hands. This included a line of 100m shares at 187p as part of a late converted trade. Dealers say it was a currency switch, or a move by one fund to another.

Defence contractor BAE Systems was marked 3 1/2p higher to 183 1/2p following an upgrade by broker UBS which has raised it from neutral to buy and lifted its 12-month target from 165p to 210p.

Gas distributor Centrica shaded 3 1/2p to 192 3/4p, though broker Merrill Lynch has raised its recommendation from neutral to buy and set a target of 215p. Merrill says the group's strategic refocusing and investment in customer relationship management should lift margins.

Celltech fell 6 3/4p to 363p after broker ING turned buyer following a review of the European market for auto-immune diseases. ING, which had rated Celltech a hold, said one of its development drugs could dominate the rheumatoid arthritis market.