Market report: Wednesday close

CITY brokers have begun reaching for the 'off' switch when it comes to dealings in satellite broadcaster

US broker Morgan Stanley did the damage by downgrading its recommendation on the shares from equal weight to underweight and slashing its 12-month target price from 610p to 480p. The broker has also reduced its subscriber estimates and no longer believes the 10m target by 2010 is achievable.

Its calculations include a higher customer retention spend as Sky+ 160 boxes are rolled out to new and existing customers. But BSkyB is coming under increasing competition from the likes of Freeview whose platforms are attracting better quality channels.

The broker warns that while the rest of the advertising-led media sector has been hard hit by the economic slowdown, BSkyB has emerged relatively unscathed, but the slowdown in consumer spending could start to bite from here on in.

It was a day of thin trading generally, with share prices in London finishing strongly as a hesitant start to trading on Wall Street gave way to strong gains as London closed.

The late jump meant the FTSE 100 index closed above the psychologically important 5000 mark: 47.03 points up at 5011. At the London close, the Dow Jones Industrial Average was 109.6 points ahead at 10,577.1.

Among leaders, Boots was showing the biggest fall on the day, down 11p at 595p after going ex-dividend. Otherwise the shares would have shown a rise on the day.

Imperial Tobacco rose 12p to 1501p after a Scottish court rejected a £500,000 claim brought by the wife of a smoker who died of lung cancer. US investment bank JP Morgan said the extent to which the judge found in favour of Imps came as a shock and is likely to deter other claimants from proceeding. JPM does not expect any new smoker trials for the next five to 10 years.

The US broker has an equal-weight rating on the shares with 1480p target price, while rival Lehman reckons the shares are up with events.

Water supplier Pennon fell 13p to 995½p after US securities house Goldman Sachs downgraded its recommendation on the shares from outperform to in-line.

Bid target Mersey Docks fell 5p to 959p and says preparations for a possible-offer by Peel, owner of the Manchester Ship Canal, are continuing. Peel, which owns 26% of Mersey, made an indicative £780m offer, worth 1000p a share, for the UK's second biggest port operator which topped a rival 925p a share offer from private-equity outfit CVC Partners.

Bob Holt's Mears Group has come off the boil following the sale of shares by several directors. After reaching a peak of 263½p in February, they firmed 4p to 224p today when the group, which renovates council properties as part of a Government pledge, said trading conditions were buoyant.

Holt took advantage of the share price strength earlier this year to sell twom shares to satisfy institutional demand. A line of 400,000 shares that had been overhanging is believed to have been cleared by broker Merrill Lynch at 221½p.

Bob Morton's Planit Holdings is another company doing well. The group, which provides computeraided design and manufacturing software, says pre-tax profits for the current year will 'materially exceed' the £1.54m achieved the previous year. The price responded with a rise of 2½p to 25½p.

Oil shares generally were marked higher after the price of North Sea oil rose above $50 a barrel. BP added 11p to 562p and Shell 9p to 486½p.