Market report: Tuesday close

DRINKS giant

Its shares were among the best blue-chip performers, climbing 24p to 811½p, just ½p off a three-year high. The group yesterday announced plans to buy Bushmills Irish whiskey from French rival Pernod Ricard for £200m. It will also spend £320m on New Zealand winemaker Montana - if Pernod's £7.5bn takeover of Allied Domecq goes ahead.

News of the deal is likely to have left US winemaker Constellation, owner of Stowells wine and Corona beer, nursing a sizeable hangover. Constellation has teamed up with Brown-Forman of Jack Daniel's fame to bid for Allied and was hoping to win the backing of Diageo. Allied slid ½p to 699½p.

News of the deal prompted WestLB to raise its recommendation on Diageo from underperform to neutral. It argues that the move increases Diageo's exposure to the global wine market and improves the chance of Pernod's bid for Allied succeeding. But rival broker Panmure has repeated its sell recommendation and 700p target.

The benchmark FTSE 100 index climbed back above 5000, supported by a surge in share prices on Wall Street this afternoon. with the Dow 90 points higher. In London, the Footsie posted a gain of 44.8 to 5025.2.

There was some heavy turnover in Cadbury Schweppes, up 5½p at 543½p, at which level several large lines went through on the ticker. They included batches of 20m and 17.8m. Boots rose 7½p to 592½p, buoyed by WestLB's move to upgrade from underperform to neutral while repeating its 590p target.

Plasterboard maker BPB is not the sexiest company in the world but it is going places. The shares rose 6p to 515½p after ABN Amro repeated its buy recommendation ahead of the company's likely promotion to the FTSE 100 in tomorrow's quarterly reshuffle. The broker has also raised its target price from 555p to 600p.

Two companies facing the chop from the top 100 are steelmaker Corus, ½p better at 43¾p, and Bunzl, even at 536p, following the demerger of its Filtrona business.

Shire Pharmaceuticals, up 11p at 590½p, received a boost from broker Smith Barney, which has begun coverage with a buy recommendation and a healthy 725p target. It says the proposed acquisition of TKT is a 'smart strategic shift with substantial potential upside and acceptable risks'. It values TKT at 200p a share and Shire at 564p, assuming a 50% chance of generic competition for Adderall, its treatment for attention deficit hyperactivity disorder, next year.

Oil industry services provider John Wood rose 4p to 156p. US investment bank JP Morgan has raised its recommendation from underweight to overweight and slapped on a 180p target.

It says John Wood has been left behind by other companies in the sub-sector and that the shares now look cheap. JPM also reckons there is evidence of a turnaround in business prospects in gas turbine services and engineering and production facilities.

Some reality has returned to trading in White Nile, the price tumbling 21p to 111½p. The oil explorer returned from suspension last week with stock market bears soon on the rack again as the price touched 164p.