Market report: Wednesday close

BIG turnover was seen in steelmaker

US securities house Morgan Stanley cut its rating on the European steel market from in-line to cautious. More than 55m Corus shares changed hands with some big lines on offer. A parcel of 3.64m went through on the ticker at 53½p, followed by a further 2.5m at the same price.

Morgan Stanley has lowered its recommendation on the company from neutral to underweight, blaming falling steel prices and the rising cost of raw materials which have brought pressure to bear on margins. It says Corus is the most exposed of the European steelmakers to rising costs.

Share prices traded within a narrow range as hopes that the first day of the new tax year would be greeted by a wad of cash coming into the market were quickly dashed. The FTSE 100 index closed up 4.5 at 4947.4, after a late recovery spurred by opening gains for share prices on Wall Street this afternoon.

Persistent takeover talk briefly hoisted Exel above 900p before the lead was reduced to 12p to 897½p. Deutsche Post is seen as the most likely bidder, and earlier this week asked shareholders for extra funds. The logistics specialistremains tight-lipped.

Profit-taking left Beefeater Gin and Canadian-Club drinks group Allied Domecq unchanged at 633p. Brokers are dismissing suggestions that SABMiller, 10½p cheaper at 833½p, will bid for rival brewer Scottish & Newcastle, down 1¾p at 477¾p.

Online bookie Sportingbet fell 8½p to 261p after broker Dresdner Kleinwort Benson sold 2.5m shares at 267p.

Alliance & Leicester lost 24&frac;p to 871½p after the shares went ex the 32.6p final dividend. Also going exdividend were Pearson, down 20½p at 634½p (15.7p) and Rank, off 4p at 285p (9.8p).

Dresdner Kleinwort Wasserstein remains upbeat about mining companies and the outlook for the price of metals medium term. It insists high prices being paid for the likes of copper and zinc can be sustained despite others suggesting they have peaked. DKW has raised the world's biggest miner, BHP Billiton - ½p better at 708p - from neutral to overweight, while upgrading Rio Tinto, up 9p at 1696p, from neutral to buy.

It has also raised its target price for Anglo-Swiss mining outfit Xstrata, 14p higher at 1009p, from 1100p to 1200p. The mining sector has been buoyed by rising metal prices and strong demand for raw materials by China.

Bid target the London Stock Exchange rose 5½p to 461p, proposed bids from Euronext and Deutsche B?rse having been shunted into the sidings by referral to the Competition Commission. US broker Smith Barney has cut its LSE price target from 570p to 462p.

UK Coal rose 10¾p to 136½p after confirming it had been target of a bid move. The operator of seven deep mines received the approach a few weeks ago but has heard nothing since.

Chip designer Imagination Technologies is in talks to license its technology to bring TV to mobile phones. But failing to close two 'significant' deals in time for its 31 March yearend brought in the bears. The shares fell 4p to 71p as the company warned of a second-half loss.

Clapham House, which buys restaurants, rose 4p to 151½p after saying trading was in line with expectations.