Market report: Wednesday close

WORRIES about a double dip in the US economy still dominated trading on the London Stock Exchange today as further falls in Japan plunged the Nikkei Average to a 19-year low.

Despite the FTSE 100 falling within 30 minutes of the open of business through the crucial 4000 level for the second time in two intra-trading days, shares were hit by a series of bear squeezes that went on throughout the session.

This led to blue-chip share prices behaving as though they were on the Big Dipper, falling by 43 points at one time, then rallying before ending down 1.7 at 4026.9. CSFB helped sentiment by saying that there was a 40% chance of a double dip, and that in any case, it would be worthwhile being overweight in UK equities.

Footsie-influential oils were mixed as crude prices fell back again, with Shell down 2p to 404p and BP off by 16 1/2p at 451 1/2p.

Insurers and financials were in the thick of the action with Prudential up 1p at 470 1/2p, Friends Provident off 2 1/4p at 134 1/4p and Old Mutual down 1/4p at 77p.

International Power led the blue-chip fallers, down 16 1/2p to 112 3/4p, after the company, under pressure in the troubled US electricity generation market, guided analysts to an 11p-to-13p earnings per share return for 2003 against the 16p expected for 2002.

Some 13 million shares changed hands and CSFB cut its target price to 188p from 260p, but said today's share price weakness is a buying opportunity for value investors. EMI hit a five-year low of 164 3/4p, down 10 1/4p, as Morgan Stanley downgraded the record and music group.

AstraZeneca stood out yesterday, leading three other blue-chips that managed to see a few gains. It was buoyed by hopes for Crestor, the cholesterol-busting drug that could be a money-spinner in the multibillion-pound markets of the US and Europe.

The Americans like AstraZeneca, especially as Crestor seems to be able to outperform rival treatments and Bank of America has set a target price of 2200p for it. The price lifted 30p to 1925p.

Despite the threat to drugs companies from copycat drugs, where sales are expected to more than double by 2007, GlaxoSmithKline gained 22p to 1189p.

An 8% setback to first-half earnings and warnings of a poor second half hit retail supplier Tibbett & Britten hard, sending its shares down 72 1/2p, almost 13%, to 495p, a low it hit around this time last year.

British Airways suffered a slide of 4 1/2p to 135 1/2p, a post-11 September low, after poor passenger figures for August.

JP Morgan placed a fair value of 550p a share on Six Continents. Formerly the hotels division of Bass, the brokers fear it may overpay for any acquisition. Its shares added 7p to 580p.

Xstrata shares were hit by fears about a Japanese tax on coal imports and its shares fell 18p to 578p, almost certain to bring about Footsie expulsion next week.

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Today's gainers and fallers
Geoff Foster reports on yesterday's trading