Market report: Wednesday close

BRITISH Airways is almost certain to return to the companies that make up the Footsie 100 in tonight's quarterly review - for the third time in 18 months.

That is despite the stock falling 7 1/2p to 220 1/4p ahead of this evening's steering committee meeting, which will decide if BA matches the criteria to rejoin the blue-chip index, in terms of size and number of shares in free circulation.

At these levels, the national carrier is valued at about £2.4bn. The shares struck a record low of 86p in March after being hit by a triple whammy of increased competition, the war in Iraq and the Sars epidemic in the Far East.

The move coincided with BA obtaining European Commission approval to operate a six-year alliance with Spain's Iberia. The move is likely to herald a future full-blown merger of the carriers to rival the recently announced link between Air France and KLM of the Netherlands.

Meanwhile, BA is likely to be joined in the top flight by business support services group Hays, 2 3/4p lighter at 125 1/2p after a line of 10m shares went through at 128p followed by 11.25m at 127 3/4p. It also posted a low in March, of 70 1/4p, reflecting difficult trading conditions and the move to hive off its logistics business.

Hays and BA may benefit from the promotion with institutional investors moved to increase their weightings in both companies.

They are likely to replace Provident Financial , down 6 1/2p at 621p which has fallen from a peak of 679p since October in a rising market, and pubs chain Mitchells & Butlers, 7p cheaper at 228 3/4p. M&B, split from Six Continents in March, is valued at £1.2bn following its recent share consolidation and special payout to shareholders.

Share prices generally fell sharply, drawing little comfort from Chancellor Gordon Brown's Pre-Budget Report and opening gains on Wall Street this afternoon. The FTSE 100 index fell 44.2 to 4335.4.

Distillers were unimpressed with the Chancellor's decision to leave excise duty unchanged during the lifetime of this Parliament. They fear they may have to carry the cost of stamping bottles of spirits to prevent duty evasion. Diageo fell 13p to 719p and Allied Domecq 7 1/2p to 404p. Glemorangie was unchanged on 832 1/2p.

Anglo-Swedish drugs giant AstraZeneca rose 8p to 2612p. US investment bank JP Morgan is impressed by the group's promising product pipeline. It says rival GlaxoSmithKline, 17p lower at 1266p, would have to demonstrate a fundamental shift in outlook before it could be considered a worthwhile investment.

Airports-to-property group Wiggins returned from suspension down 1/2p at 4 1/4p. The debt-laden group plans to raise £46m by way of an issue of shares, convertible loan stock and warrants.

NHS software specialist iSoft rallied 3 3/4p to 316 1/4p after reassuring shareholders that its £700m merger with Torex, up 6 1/2p at 520p, would go ahead. Last week, it was referred back to the Office of Fair Trading.

Computer services group Northgate Information Solutions was suspended at 51 3/4p pending details of a reverse takeover of Rebus HR, the personnel and payroll services group, in a deal worth £150m.

The continuing boom in car sales has boosted profits at Reg Vardy, up 6p at 484p. Pre-tax profits surged 35% to £24.6m while the interim payout soars 21% to 5.2p.

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