Market report: Tuesday close

OIL and gas explorer

The first came from Deutsche Bank, which has moved from hold to sell and takes the view that we may have seen the best of the oil price for the time being. It was strong in the fourth quarter, which should be reflected in this week's trading update from BP, and that has provided a useful boost to the BG share price.

Deutsche now reckons the shares look fair value and has set a target of 260p against the current 287 1/2p, up 1p.

In the first quarter of last year, the oil price was boosted during the run-up to war with Iraq. That will not be a factor in the first three months of 2004 and it may slip ahead of next month's crucial meeting of members of the Opec producers' cartel.

Meanwhile, US securities house Goldman Sachs has also taken a bearish line on BG and cut its earnings estimates to ref lect the prospect of profit-taking and a lower crude price.

Its views on BG are contained in its latest review of the oil sector where it has upgraded BP, 1 3/4p cheaper at 453p, from inline to outperform to take account of higher prices for Brent crude, US natural gas and refining margins.

City investors could not stretch the market's winning run to a record 12 days with share prices struggling to stay above 4500. The FTSE 100 index was down 7.4 points at 4505.9. Wall Street opened lower this afternoon following a drop in the Supply Management Index and factory orders.

Further weakness in the dollar hit some of the UK's big overseas earners, AstraZeneca falling 31p to 2623p, Diageo 14 1/2p to 718p, BAT 10 1/2p to 759p and GlaxoSmith Kline 21p to 1260p.

Broker Merrill Lynch sees growing demand in the chemicals industry and reckons ICI, 3 1/2p cheaper at 197 1/2p, is one to watch. It has set a target of 240p.

Speculative buying lifted Singer & Friedlander 7p to 215p. Talk of a bid before Christmas came to nothing. Nordic bank Kaupthing Bunadarbanki owns almost 10%.

Shareholders in fashion retailer Next Groupwere given something to celebrate-with news of bumper trading during the run-up to Christmas. Pre-tax profits for the full year are set to come in at £340m compared with £301m. The shares jumped 120p to 1260p as Merrill Lynch rated them a buy and set a 12-month target of 1240p.

Brokers say that Next may have achieved its success at the expense of rival Marks & Spencer, 5 3/4p cheaper at 279p, which is thought to have struggled. French Connection rallied from yesterday's losses to trade unchanged at 317 1/2p.

WH Smith continued to bounce back from Friday's profits warning with a rise of 6p to 264 1/4p. The speculators insist it is looking vulnerable to a bid.

Retailer Kesa Electrical fell 7 1/4p to 256 1/2p after Deutsche Bank downgraded it from hold to sell. It has risen sharply in recent weeks on bid talk.

Kesa was demerged from Kingfisher, which today rose a further 1 1/4p to 289 3/4p driven by persistent talk of a bid from US rival Home Depot.

GUS rose 13p to 791p. Its personal credit rating business Experian has sold its US outsourcing side to the management for $28m (£15m).

Vodafone firmed 3/4p to a two-year high of 144 1/4p. The mobile phones operator has bought back a further 2.75m of its own shares for between 142 3/4p and 143 1/2p.