Market Report: Carnival sails ahead on word of cruise price rises

Luxury cruises just got a little more expensive. Word from the industry is that prices for sailings later this year have been pushed up by the big players, in a move that bodes well for results from Carnival, the US giant which swallowed P&O Princess Cruises last year.

Luxury cruises just got a little more expensive. Word from the industry is that prices for sailings later this year have been pushed up by the big players, in a move that bodes well for results from Carnival, the US giant which swallowed P&O Princess Cruises last year.

Carnival shares steamed ahead yesterday, up 41p to 2,427p, and shrugged off recent worries that the high oil price has inflated fuel costs.

Deutsche Bank, issuing a research note yesterday, said fears over costs have been overdone by the market, which has pushed Carnival shares down from a peak of 2,603p last month. The German-owned broker slapped a new "buy" recommendation on the stock, even though it cut profit forecasts in anticipation of Carnival's next trading update, which will have to outline the extent of the fuel rises.

Word of rising cruise-prices will come as relief to those who had feared that an increase in capacity would depress margins as the year goes on. More ships are making more sailings as the industry responds to recovering demand, and bears of Carnival shares had previously argued that the company had moved too fast in a bid to grab market share.

There was plenty of corporate news yesterday to occupy traders, which meant they had less time for fretting over the future direction of the economy. For those of a nervous disposition, a positive trading update from the economically-sensitive chemicals group ICI eased minds. The company, often described as a "bellwether", said demand was improving, it was on track to meet all its financial targets, and the dividend policy remains intact. Up 14p to 214p, it was the FTSE 100's best performer, and helped the index of blue-chip companies close up 20.3 points at 4,438.3.

There was also big buying of Marks & Spencer amid vague talk that the beleaguered retail giant would fall prey to a bid. According to one story, a merchant bank was already poring over the numbers on behalf of a mystery client. Last time M&S lost its way, at the turn of the millennium, it attracted the interest of one Philip Green, and the talk again is of private equity interest. On Tuesday, the chief executive Roger Holmes - newly liberated of his chairman, Luc Vandevelde - promised a massive overhaul of the business. M&S shares closed up 10.25p at 290.5p.

The other retail sector basket case, J Sainsbury, looked like it was heading in the other direction, bottom of the FTSE 100 performance table with a 7.25p dip to 265.75p. But as of yesterday, buyers were no longer eligible for the final dividend of almost 11.4p, so the stock held up very well indeed. That was despite a very bearish note from Smith Barney, whose analysts were among those who went in to see the chief executive, Justin King, for breakfast yesterday. They came away unimpressed. Having hoped for some strategic vision for reversing Sainsbury's market share decline, Mr King "pleaded the fifth amendment" on most key questions, according to Smith Barney.

Among the smaller retailers, Peacock, the discounter, was up a penny on talk of very strong trading. And Big Food Group, the owner of Iceland, was off 5p at 101p ahead of full-year results due today.

Teleunit became the first Italian company to take a primary listing on the London Stock Exchange, joining the junior AIM with a £10m placing. The company has a telecoms licence in Umbria, Northern Italy, and wants to expand into neighbouring regions. The stock closed at 21.5p, up 1.5p from its placing price. Michelmersh, a brick maker, was up from a placing price of 56p to 65p on its first day, having raised £5.2m on AIM.

Vislink, the broadcasting hardware company chaired by the serial entrepreneur Bob Morton, said its first-half profits would fall below expectations because of poor trading in the UK, sending its shares down 2.25p to 27.25p.

A website tip sent shares in Ideal Shopping Direct up 3.5p to 77.5p. The company's TV shopping channel launched recently on Freeview, giving it access to another 3 million potential viewers. And news that an analyst on an investment website had recommended selling Marchpole, the designer of YSL-branded menswear, left its shares languishing a ha'penny lower at 18.75p despite director share buying.

Ofex-listed GSC Property - a diverse little landlord whose portfolio includes the largest single-screen cinema in Liverpool, the busiest banking hall in south-east Essex, the largest pub in Canterbury and the newest drive-thru restaurant in Birmingham - published, alongside its first annual results, the tantalising promise to improve the use, and presumably the profitability, of some properties where tenants have unused or under-utilised space. Brokers are hoping for more details at the annual shareholder meeting on 29 June. GSC shares were steady at 84.5p.