Market report: Wednesday close

THE dramatic slump in stock market turnover during the past couple of months is hurting the likes of 'Harry Hedge Fund'.

He needs volatile conditions and liquidity in order to function properly. The thousands of hedge funds around the word are expensive to invest in, with high charges, but hundreds have gone to the wall in the past six months.

Man Group was one of the biggest fallers in the FTSE 100, down 94p at 1272p. It is the biggest hedge fund operator in the UK and is starting to feel the pain after 11 of its 12 diversified futures funds headed south during the first half. This could lead to profit downgrades by brokers. Dealers also fear it may be a similar story in the second half.

Hedge fund group RAB Capital, down 5 1/2p at 31p, also says it suffered from a tough market in the second quarter of the year. But the launch of new funds led to rapid growth at the young company and pre-tax profits jumped to £4.2m over the half-year to June, against £900,000 a year ago.

The 40 staff shared bonuses of £2.1m, while shareholders get a 0.1p interim dividend.

The rest of the market made the most of a 123-point rise in New York's Dow overnight and strong gains this morning in the Far East. London's FTSE 100 rose 31.3 points to 4356.2, despite an uncertain start to trading in New York. In early trading, the Dow Jones industrial average fell 5.81 to 10,079.33 and the Nasdaq composite index shed 12.87 to 1,856.23.

In London, HBOS led blue-chips higher with a rise of 19p to 694p on the back of strong profit numbers, but Unilever failed to please after following up disappointing first-quarter numbers with another poor performance that left its shares nursing a fall of 21 1/2p to 485 1/2p.

Reuters rallied 10p to 317p from yesterday's kicking after interim results which were reckoned to have signalled an end to its revenue decline. But brokers have differing views on prospects.

UBS has cut its target from 425p to 355p while Lehman Brothers takes a more optimistic line, having reduced from 511p to 490p but saying the value argument remains strong, although momentum has gone. Goldman Sachs has lifted its earnings forecast for 2004 by 5% to 12.3p a share while JP Morgan has moved from neutral to overweight, claiming long-term value.

Dealing in PPL Therapeutics was suspended at 6 1/4p pending an announcement.

AstraZeneca rose 8p to 2428p after a line of 2.5m shares went through at 2435p. There was also one million GlaxoSmithKline on offer at 1102p as the price rose 11p to 1099p.

AeroBox perked up 5 1/4p to 23 3/4p after reaching an amicable settlement with Watermark, up 17p at 143 1/2p, over their joint venture agreement. The former has developed a new lightweight container for use on passenger aircraft which Watermark has arranged to put on trial with various airlines.

Watermark will get 6.9m AeroBox shares (7%) and be paid a marketing charge on sales to four airlines for six months.

Leisure complex operator Center Parcs (UK) marked time at 84 3/4p as UBS began coverage with a buy rating and 12-month target of 104p.

Advanced Technology returned from suspension 9 1/4p lower at 6p following publication of full-year results showing falling sales and increased losses.

Bullion Resources was also allowed to resume trading again, unchanged on 3p, after publishing its annual report and accounts.

Italian property services group Norman 95 has begun trading on Aim following a placing at 90 euro cents. The shares traded at 86 cents.