Market report: Wednesday close

INDEX heavyweight

Shell was off 6½p at 538½p. Shareholders yesterday voted emphatically to merge the British and Dutch arms of the business. That should put it in a stronger position to make acquisitions, which it will be able to fund with paper rather than cash.

However, reports that the new-look firm will cap acquisitions at $9bn (£5bn) would rule out a takeover of gas-focused BG, valued at about £17bn. That policy would also squash one of the City's most frequent buyout rumours, and BG slipped 7¼p to 464¾p.

Despite weakness in oil stocks and a poor start to trading on Wall Street, the FTSE 100 mustered a rise of 18.7 to close at 5109.1.

Among the index's high-fliers was airports operator BAA, 23½p better at 622p following a UBS upgrade to buy from neutral. The broker raised its target 50p to 700p.

Cable & Wireless spurted 5½p to 148½p on renewed speculation that France Telecom may launch a takeover. Bid hopes have been revived as the French company has flagged plans to remove its €500m (£332m) acquisitions ceiling.

P&O advanced 1¼p to 320¼p after saying it has agreed to sell its 25% shareholding in Royal P&O Nedlloyd to two financial institutions acting on behalf of AP Moeller-Maersk, for about £378m. P&O said it would make a profit of about £175m on the sale.

IT firm Computacenter bounced 9¾p to 190¾p after heavy losses yesterday on the back of a profit warning and a gloomy outlook statement. CSFB has upgraded the company to outperform from neutral although it has also pruned its target to 200p from 290p.

UBS has downgraded Wilson Bowden to neutral from buy, lowering its sights to 1186p from 1406p, following a 22% first-half sales fall at the housebuilder. However, Merrill Lynch has retained its buy rating, setting a 1320p target. The shares were off 3p at 1127p.

Drugs firm Ardana, which listed in March and develops and markets products to improve human reproductive health, said losses for the year to the end of March were down to £8.4m from £15.2m a year ago. It added that it was confident it would continue to deliver 'good news on a number of fronts' over the rest of 2005. The shares rose 1p to 118p as Nomura reiterated its buy recommendation.

Aim-listed Sinclair Pharma firmed 5½p to 130½p after announcing licensing deals in Israel, North America and Colombia.

Sterling Energy, also listed on Aim said it has successfully completed well operations at gas deposits in the Gulf of Mexico that represent 'a significant step' towards its target of doubling production from the region by the end of the year, enabling it to cash in on soaring US gas prices. The shares nudged ahead by ½p to 18p.

Hambledon Mining, which is developing precious metals deposits in Kazakhstan, has unveiled a 'significant increase' in its gold resources, with the overall total up from 2.8m ounces to 3.5m. The shares added 1p to 8.75p.

European Diamonds advanced 2p to 41½p after the company said it had started production in Lesotho.