Market report: Weds close

SELL

BP, Britain's second-biggest company, responded to the move with a rise of 2 1/4p before falling back to show a loss of 3/4p at 411p - well off its year's high of 449 1/2p - while Shell put on 1/2p at 370 1/2p.

CSFB argues Shell still has between three and four years left to run of a major investment programme, while BP is coming to the end of its high-spending cycle. As a result, returns from Shell will be, at best, flat or falling while those of BP will improve.

Earlier in the day, share prices looked to be on track to close at a new high for the year. The FTSE 100 index recovered from a slow start to climb above 4400, rising 17.5 points to 4406.2, but later slipped back to be down 18.4 at 4370.3.

Dealers said prices were being squeezed higher in thin trading. American markets will be closed tomorrow for Thanksgiving and investors are reluctant to open new positions before Monday.

Food giant Unilever dipped 6p to 513 1/2p. A line of 30m shares went through at 519 1/2p as part of a late converted trade that may have formed part of a currency switch.

Troubled power generator British Energy is calling for extra funds to help bail it out. It is in talks about increasing the size of the £200m loan being provided by the Government to help it continue trading. The move follows an escalation in the cost of safety maintenance at its Heysham 1 and Sizewell B nuclear power stations.

A delay in bringing both back into production has caused losses to double to £50m. The company is negotiating a £5bn rescue package with its creditors, but the Government has warned it will pull the plug if losses continue to mount. The ordinary shares slipped 0.35p to 4.95p.

Jarvis fell a further 8 1/2p to 214 1/4p. Broker Merrill Lynch has downgraded from buy to neutral, complaining of 'credibility issues and weakening cash flows'. London mayoral candidate Steven Norris was appointed chairman yesterday.

Broker Dresdner Kleinwort Wasserstein is turning increasingly bearish of the mining sector.

The trouble is no one told the mining companies, which all traded higher. It has raised Rio Tinto, up 24p at 1403p, from sell to hold while cutting BHP Billiton, 2 1/4p firmer at 441 1/2p, from hold to reduce and Anglo American, up 13p at 1225p, from reduce to sell. It is telling clients to switch out of Anglo American and into Rio Tinto, but keeps an underweight rating on the sector.

EMI improved 5 3/4p to 169 1/2p. The credit rating agencies have taken the music publisher off credit risk watch after it withdrew its $1.6bn (£942m) offer for Time Warner's recorded music division.

Brokers continued to reflect on yesterday's impressive trading update from Tesco, though profit-taking left it 4 1/4p cheaper at 248 1/2p. Broker UBS reckons there is still plenty to go for in the shares and has repeated its buy rating while raising its target 10p to 290p. Rival WestLB Panmure has begun coverage with an outperform rating.

Steelmaker Corus was heavily traded, a further 34m shares changing hands as the price hardened 1/2p to 32 1/4p. UBS has repeated its buy recommendation after the group's £307m rescue rights issue and tweaked its price target from 35p to 40p.