Reuters suffers after share dealings gloom

THE slump in financial markets worldwide is starting to take a heavy toll on Reuters, down 37p, or almost 6%, at 620p on turnover of more than 13 million shares, making it by far the biggest faller among the top 100 companies today.

The company's own broker ABN Amro did the damage after telling clients shares in the news and financial information supplier had further to fall. It has reduced its 12-month target price from 597p to 565p, blaming the downturn in business at its separately-quoted share dealing arm Instinet. Only last week Instinet reported a 30% drop in business during December, following a 14% decline during November.

Instinet has been overhauled in terms of trading volume on Nasdaq by its nearest competitor Island. The Instinet share price has also suffered.

Floated last May at $18, it is trading around $8.

ABN says the outlook for revenue this year remains sluggish, putting pressure on margins. It continues to rate the shares no better than hold. The Reuters price has collapsed from a peak of 1158p during the past year.

Another spate of bear closing enabled the rest of the market to counter a setback of 212 points for the Dow overnight in New York. Traders had been braced for sharp opening falls and were pleasantly surprised by the market's resilience. Early indications from the financial futures market pointed to an opening rally of 40 points on Wall Street this afternoon. The FTSE 100 index rose 24.9 to 5152.5.

Vodafone was up 3p to 1651/2p. US securities house Lehman Brothers raised its target price from 250p to 275p and made it one of top 10 picks for 2002.

Others include Royal Bank of Scotland, 15p dearer at 1715p, and Hilton Group, up 43/4p at 2281/4p.

Brokers appear divided about prospects for GlaxoSmithKline, down 11p at 1689p.

US securities house Morgan Stanley slashed its target price by 200p to 1950p but repeats its outperformance advice, while UBS Warburg rates the shares a buy with a 2100p target price. Goldman Sachs has warned that sentiment remains dull in the short term.

The drugs giant meets the US Food and Drug Administration today to discuss new applications for its asthma treatments Flovent Diskus and Advair Diskus.

GSK wants to use them to treat pulmonary disease. Brokers say the group may have its work cut out convincing the FDA to grant approval.

Galahad Capital jumped 11/2p to 9p following news of heavy losses and a boardroom shake-up. Mark Slater has been appointed chairman.

He is the son of former Slater Walker wheelerdealer Jim Slater.

Word is dad has also taken a stake in the company - hence the rise in the share price.

The biggest oil discovery in the North Sea for a decade lifted BG 2p to 2763/4p. It has a 19.9% stake in the Buzzard field, 100 miles off Aberdeen.

Edinburgh Oil & Gas, with a 5% stake, gushed 5p to 117p.

Further exploratory drilling in Buzzard could lift reserves to one billion barrels, making it one of the 10 largest fields in the North Sea.

Compass Group held steady at 512p as Goldman Sachs added the shares to its European Private Client Recommended Model Portfolio. Dairy Crest hardened 2p to 4331/2p after broker UBS Warburg raised its target price from 400p to 485p and repeated its buy recommendation.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed in the tables. Ofex prices relate to the previous close.

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