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Market report: Thursday close

ALMOST 10% of shares in

MFI

Turnover of more than 60m shares was so frenetic that City traders were convinced the furniture retailer's management would soon put out a statement But one was not forthcoming.

'There is no smoke without fire,' said one experienced hand. 'This price rise has been backed up by some massive trading.'

MFI has been the subject of intense bid speculation, with a series of poor trading statements that culminated in a profits warning in September. The share price has suffered accordingly, leading to talk of a management buyout.

The group is thought also to have been looking for a buyer for its Howden's joinery business in which Kingfisher has shown some interest. But now speculators are talking of a bid worth 145p a share from GUS, valuing MFI at £901m.

Marks & Spencer continued its downward path, losing 3 1/2p to 353p on growing worries over trading, with like-for-like declines said to be well into double-digit territory.

The High Street stores group announces its half-year results on Tuesday. It does not usually comment on current trading at the half-year stage but, with so many rumours doing the rounds, chief executive Stuart Rose is expected to break with tradition and give some guidance on performance.

Shares generally drifted lower on lack of support, with City investors unable to decide which way the market will move in the short term. The FTSE 100 index, which came within a whisker of a two-year high yesterday, closed 9.8 points up at 4728.3, reversing earlier losses.

Turnover remained on the low side, but was boosted by a line of 125m shares in BT (2 1/2p up at 188p) which went through at 185 1/2p. It formed part of a currency conversion trade.

Smith & Nephew jumped 10%, or 48 1/2p, to 517p, shrugging off fears of a slowdown in its key orthopaedics market. It predicts high-teens sales growth next year after 19% growth in third quarter sales, especially in hips and knees in the US. Group profits rose 15% to £66m.

The celebration by bosses of the big drug companies after George Bush's re-election may end up leaving them nursing nasty hangovers. David R Risinger, drugs analyst with Merrill Lynch, warns: 'Republican support of the pharmaceutical industry has waned over the past year'.

The US needs to pay for the Medicaid programme, now thought to be running at 25% above estimates. Cheaper drugs might provide some leverage. AstraZeneca, unchanged at 2319p and Glaxo-SmithKline shed 5p to 1188p.

Building materials group Novar climbed 19 1/4p to 143p on news of a bid approach from Melrose. Terms will be between 140p and 150p a share, valuing the business at £1.2bn. Aim-listed Melrose, up 13 1/2p at 119 1/2p, was formally Wassall, an acquisition vehicle set up by two former Hanson men.

Aim-listed Energy Technique jumped 0.5p to 4.75p. It has signed up Fl?ktWoods Group as the distributor of its air filtration unit in Scandinavia. ET says the unit is being used in the fight against the MRSA superbug in hospitals.

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