Uroxatral

MYSTERY SHROUDED the last half an hour of trading on the London Stock Exchange yesterday as the FTSE 100 gave up a near 100-point advance to end just 11.8 points higher at 5,164.9.

The slump this side of the Atlantic was all the more puzzling as Wall Street was at the same time storming higher. In response a number of rumours flew around the City. By far the most credible was one that suggested Goldman Sachs would today place around 900 million shares in Vodafone on behalf of Hutchison Whampoa. Investors wishing to buy in the placing are said to have sold down their other telecom sector holdings in order to free up capital to purchase Vodafone shares.

Dealers also noted that during the sell-off in the last 30 minutes of trading there was lively trade in FTSE 100 futures contracts. Talk had it that Goldman Sachs bought 12,000 FTSE 100 futures in order to hedge itself against a possible slump in the index while it carried out the placing. One dealer calculated that the size of the futures deal would be an almost perfect hedge for a 900 million share placing of Vodafone stock, which finished down 4.25p at 161.25p. Goldman Sachs was unwilling to comment on the market rumours.

Market watchers suggested that now would be a good time for Hutchison to sell its stake. Vodafone shares have been strong of late, rising from a near three-year low in the last month.

Another rumour offered by stock market players as explanation for the fall was that one institution had sold about pounds 1bn of European equities and bought US stocks. Hence the fall in London and the continued gains on Wall Street.

Elsewhere there was a raft of positive broker comment which lifted Friends Provident from an all-time low of 172p to 183p, up 11p on the day. The consensus was that the slide since its flotation in July had gone too far. Merrill Lynch said that could not explain the sharp sell-off of the stock. The US broker reckons the current share price is a clear buying opportunity and estimates embedded value of 195p per share. Dresdner Kleinwort Wassterstein upgraded to "buy" from "accumulate" while fellow German broker WestLB went to "outperform" from "neutral" with by far the most bullish price target of 230p.

Media stocks were in vogue as investors digested upbeat comments from News Corp chairman Rupert Murdoch. The media mogul said that advertising bookings had risen strongly following their nadir post 11 September and were at their strongest levels in several months. Hence Pearson rose 28p to 788p, United Business Media improved 30.5p to 426.5p and Reed International firmed 13p to 593p.

WPP was 31.5p higher at 571.5p despite ABN Amro telling clients to take profits, noting that the shares have gained more than 20 per cent in the last week. The Dutch broker reckons that since WPP is attempting to wriggle out of its bid for Tempus it may have to issue a trading update before the one scheduled for 25 October. This can only contain bad news given the general slowdown in the sector, according to ABN. It recently cut its current year earnings estimates by 9 per cent but yesterday warned that the downgrade may not be enough. There could easily be the need for another 10 per cent cut.

Daily Mail & General Trust rose 66p to 671p as tracker funds bought the stock ahead of its expected inclusion in the MSCI Index, following Tuesday's reshuffle of the index that is run by Morgan Stanley and widely followed by institutions. Dealers explained the particularly sharp rise, a gain of 10 per cent on the day, as due to the relative illiquidity of the stock.

Continued director share buying at Cookson was taken as a strong sign of confidence with investors piling in after management. It put on 8p to 50.5p thanks to Raymond Sharpe's purchase of 25,000 shares at 44p. Premier Farnell was helped 26p better at 200p as director Raymond Hirst picked up 10,000 share at 190p.

Commerzbank Securities upgraded the biotech sector to "buy" all the way from "reduce" arguing that it offers significant upside. It was particularly bullish on Cambridge Antibody Technology, 125p higher at 1,650p and Celltech which rose 84p to 884p. Autonomy was not so lucky falling 8p to 242p after analysts at Banc of America cut their target price to 400p from 500p. Sameer Hirji at the bank, however, remained positive on the stock long term and argued that the firm's strong cash position should take it through the current downturn.

Knowledge Management Software gained 13.5p to 4.5p after saying that it was in talks with a major potential customer regarding a contract which would generate "significant revenues" for the group. Reflec continued to slide after Wednesday's massive profit warning, down 0.25p to 2p.

HEALTHCARE information technology firm iSoft gained 12.5p to 230p as Credit Suisse First Boston started coverage with a "buy" rating and a 267p target price. The broker is confident iSoft is well placed to benefit from the strong growth in UK healthcare IT spend. It estimates the market is worth about pounds 1bn and will be further boosted by the government's Information for Health initiative. The group is also expected to expand overseas.

MARKET MOVERS

BSkyB 749p (up 46p, 6.5 per cent). Dresdner Kleinwort Wasserstein says "buy" with 930p target price.

Abbey National 1,112p (up 42p, 3.9 per cent). UBS Warburg upgrade to "buy" from "hold" with 1,220 target price.

BHP Billiton 308p (up 11p, 3.7 per cent). Positive Mexico drilling results.

TTP Communications 102p (up 15.5p, 17.9 per cent). Gains ahead of results due on Tuesday.

SkyePharma 69p (up 8.25p, 13.6 per cent). Continues to gain from recent US approval for its UroXatral drug.

Powderject 431p (up 26p, 6.4 per cent). Wins $1m from the US government to support development of powdered DNA vaccine against HIV.

Riversoft 12.5p (up 3.5p, 38.9 per cent). Rally from all-time lows amid suggestions group may be vulnerable to a bid.

Retail Decision 22.5p (up 4.5p, 25 per cent). Wins credit card fraud protection contract from Brittany Ferries.

LA Fitness 244p (up 23p, 10.9 per cent). Positive broker comment after solid full-year results.

Waterman Partnership 132.5p (up 17p, 13.4 per cent). Full-year profits soar 21 per cent to pounds 3.5m.

BT 340.25p (down 34.75p, down 9.3 per cent). Weak subscriber numbers from wireless division mmO2.

Cable & Wireless 284p (down 10p, 3.4 per cent). Goldman Sachs reiterate "underperform" stance on global telecoms.

AB Foods 453p (down 12p, 2.5 per cent). Poor third-quarter sales figures from peer Danone take their toll.

Misys 258p (down 18p, 6.5 per cent). Brokerage Nomura cuts its estimates.

British Energy 269p (down 5.5p, 2.0 per cent). ABN Amro downgrade to "hold" from "buy".

Pennant International 11.5p (down 4p, 25.8 per cent). Warns investors to expect a loss in the fourth quarter.

Genus 79p (down 10p, 11.2 per cent). Canadian unit Gensel set to close its operations after fundraising failure.

SEAQ TRADES: 178,107

SEAQ VOLUMES: 3.14bn

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