Market report: Wednesday close

CITY investors were scurrying for cover today as the blue-chip shares barometer slumped to its lowest since the end of January.

The latest sell-off in London saw the FTSE 100 index dive below 4900, weighed down by a series of shares going ex-dividend - the equivalent of a four-point fall. It was left nursing a loss of 23.2 to 4895.8. That came after big falls on the Dow overnight in New York, where investors were unnerved by another drop in consumer confidence, which brokers blamed on rising petrol prices.

It's cheers all round down the pub these days where the price of a pint is nudging £3 and the fight to get to the bar becomes increasingly difficult. In fact, things are looking up generally for your local's landlord, who appears to be holding up well to the prospect of longer opening hours and a further rise in the minimum wage.

Broker Dresdner Kleinwort Wasserstein is upbeat about medium-term prospects for the chains. It has pointed out to clients that capital spending is falling and free-cashflow yields of 8% to 11% could be used for acquisitions. That would certainly put a nice head on shares of the smaller pubcos.

Top of DKW's shopping list is JD Wetherspoon, 4½p dearer at 259½p, which it has raised from add to buy. It has also lifted Regent Inns, ¼p softer at 89½p, Greene King, up 9p at 1280p, Wolverhampton & Dudley, off 22p at 1082p, and Punch Taverns 13p better at 682½p, from hold to buy.

Enterprise Inns, Britain's biggest pubs landlord, said its takeover of the Unique Pub Company would reap £5m more cost savings this year than expected.

It bought Unique's 4000 pubs for £2.3bn a year ago and expects £27m of annual savings. Profits for the first half of the year will be 'comfortably' in line with City forecasts, the group said. The shares rose 22½p to 768p.

The commercial property market was brought into sharp focus by US securities house Morgan Stanley, which has cut its price targets across the board.

It has reduced British Land, 4p easier 802½p, from 1100p to 1080p, Brixton Estate, Liberty International, 1½p higher at 963p, from 950p to 940p, and Hammerson, 5p cheaper at 834p, from 880p to 870p.

Satellite broadcaster BSkyB was 35½p better at 581½p after US broker Lehman Brothers raised its recommendation from underweight to equalweight and its target from 600p to 630p. It says the shares have underperformed and ignored the benefits of growing subscriber numbers.

Zoo magazine publisher and Magic radio broadcaster Emap dipped 5p to 830p. The group's latest trading update failed to live up to expectations. Brokers blamed a downturn in France.

CSFB is urging clients to give High Street banks a wide berth. It warns that mortgage and consumer credit volumes are slowing. Northern Rock, down 9½p at 782½p, has been downgraded from neutral to underperform.

The broker is also concerned about Egg, unmoved on 114½p, Alliance & Leicester, 3p easier at 879p, and Bradford & Bingley, off 1p at 309¼p. Islamic Bank of Britain climbed another 5½p to 81½p.

It was the first day on Aim for Central China Gold Fields following a placing by broker Philip Securities at 8p. The shares started life at 8¾p and settled at 7¼p.