Market report: Tuesday close

By Mickey Clark for MailOnline
Updated: 12:01 EDT, 7 November 2006

Motorists must brace themselves for dearer prices at the pumps in the run-up to Christmas, Goldman Sachs told clients today as it forecast the price of oil would again reach $75 a barrel by the year-end.

The investment bank blames the rise on an expected drop in US gross domestic product in 2007, which has been factored in by energy markets, and a short position in oil futures of about 90m barrels that will need to be covered. There has also been a big draw-down of the US oil inventory.

Goldman is urging clients to buy energy stocks during the fourth quarter, and that was behind gains in BP, up 1½p at 598½p, Royal Dutch Shell, 14p to the good at 1898p, and BG Group, 1½p dearer at 698½p.

London shares generally were trading at a five-year high after strong performances overnight on Wall Street and today in the Far East, where interest rates have been cut. The FTSE 100 index rose 19.5 to 6244.0, although not everyone is convinced by the current bull run. Broker Credit Suisse is forecasting short-term weakness and expects the Footsie to end the year lower than at present.

The City gave the thumbs-up to interim results from Marks & Spencer, up 41½p at a record 698p. Yellow pages and website group Yell was the biggest faller among blue-chips, losing 45p to 580p after confusing the market with its first-half numbers. Profits dived almost a half to £58.1m but earnings before tax, interest and depreciation rose 16% to £269m.

That follows the group's €3.3bn (£2.2bn) takeover of Spanish rival TPI. Yell is sticking with its full-year guidance and the interim dividend is up 12% to 5.7p.

Investment manager Henderson, which recently bought John Laing for £887m, fell 3¾p to 112¼p. Broker UBS has placed a parcel of 48m shares at about 111p.

Bookie William Hill shaded 3½p to 639½p. Chief operating officer Tom Singer has stepped down after the company took a look at his role, and his duties will be covered by chief executive David Harding.

Bespak, maker of inhalers and other drug-delivery products, now expects current-year profits to exceed its own forecasts. The shares leapt 42½p to 630p.

Rival Protherics dropped 16¼p to 65p after the company announced its second drugs delay in a week.

US approval for its Voraxaze now looks as if it will be delayed a year more than anticipated after the US Food and Drug Administration demanded more information. The group now expects approval for the treatment in the second half of 2008.

Aim-listed Flightstore was suspended today, having soared 737% or 0.59p to 0.67p. It turns out that stockbroker Chris Potts and his mates are spending £200,000 buying a 95% stake in the shell. He will then use Flightstore to acquire a company involved in solar technology.

Potts, a former Winterflood and Evolution Beeson Gregory market-maker, sprang to prominence three years ago when he was fined £75,000 by the Financial Services Authority for short-selling shares of another Aim-listed company, Room Service.

The FSA accused him of distorting the market in Room Service by selling short more shares than were in issue at the time.