Market report: Tuesday close

ROYAL Bank of Scotland remains the darling of its sector. Before the group publishes full-year numbers, the Queen's own broker, Cazenove, has come out with a glowing tribute to RBS, which also owns NatWest and Royal banker Coutts.

Shares of RBS were 14p lower at 1627p ahead of next Thursday's results. But traders are braced for some bumper profits as the benefits of the NatWest acquisition continue to percolate through. Broker Williams de Broë comes in at the top end of the range with a pre-tax forecast of £7.26bn while BNP Paribas has pencilled in £6.04bn. The market consensus is about £6.3bn.

Cazenove was telling clients today the shares are a raging buy and that valuation was compelling. It said much of the risk relating to the shares was overdone.

The bank reporting season gets into full swing on Thursday with final numbers from Barclays, down 7p at 510p. Boss Matt Barrett is expected to be quizzed on future strategy and on whether he has finally drawn up takeover targets.

The FTSE 100 index fell 29.5 at 4404.9. Sentiment was dampened by full-year numbers from BP, at the bottom end of expectations. The shares fell 10 3/4p to 416p, despite a cut in oil production agreed by Opec.

Grocer J Sainsbury shaded 7 1/4p to 281 1/2p after a line of 13m shares went through at 288 3/4p.

Broker Panmure Gordon has turned from neutral to outright buyer and lifted its valuation from 300p to 330p. Panmure says profits will fall in 2004-05, which is already discounted in the market. But it believes the brand is 'fixable' and the company has 'fantastic' assets.

Logica CMG dipped 4 1/2p to 292 1/2p. A line of 6.95m shares went through at 297p last night.

Shares of Business Post touched a record high with a jump of 9 1/2p to 538p after getting access to the Royal Mail's local sorting and delivery network.

From April, Business Post will offer large mailers - those posting thousands of letters a day - two- day delivery with track-and-trace up to the point of handover to the Royal Mail. It hopes eventually to obtain about 3% of the large-mailing market, worth an estimated £5bn a year.

Broker Merrill Lynch has raised its target on Arriva, up 11 1/2p at 367p, from 455p to 466p, and repeated its buy recommendation. It has also increased its earnings estimates for the bus and rail operator, reflecting a strong performance by its UK Rail division.

Wolseley jumped 16 1/2p to 819 1/2p. Cazenove has raised it from hold to buy following a meeting with the builders' merchant yesterday.

Discount airline operator easyJet rose 11 1/4p to 333 3/4p as long-term bear broker ABN Amro turned bullish by moving from neutral to buy. British Airways rose 12 1/2p to 302p as Deutsche Bank moved from hold to buy.

Filtronic founder and chairman David Rhodes is £2.35m better off today after selling 500,000 shares at 470p. He continues to hold 3.73m, or 5% of the company. Finance director John Samuel has sold 80,000 shares, reducing his stake to 370,459. Filtronic fell 6 3/4p to 463 1/4p.

Financier Jim Slater's Galahad Gold rose 3 3/4p to 24 3/4p after raising pre-tax profits last year from £174,000 to £2.5m following the acquisition of Shambhala Gold.