Market Report: Rose provides fresh tonic for recovering M&S

When M&S defeated the retail entrepreneur Philip Green's hostile bid for the company in June 2004, many observers thought Mr Rose faced an impossible task in living up to shareholders' expectations, never mind his own. However, the M&S faithful have been well rewarded, and not only has the stock risen past the 400p a share Green offered, it has climbed to levels not seen since the late 1990s. The retailer's shares closed at 510p yesterday, a price not seen since August 1998.

Mr Rose is in bullish mood, and brokers and analysts were given more confidence by comments he made at a Deutsche Bank retail conference held yesterday in Milton Keynes. The heavyweight US broker Morgan Stanley increased its price target on the stock to 550p from 510p, with a "blue-sky" valuation of 680p a share. At the time of his defeat, Mr Green promised a "retail judgement day", but he probably was not expecting it to come from his victorious foe Mr Rose.

Scottish & Newcastle was another FTSE 100 stock that managed to rise against a falling market, as the Swiss broker UBS increased its price target on the brewer on the back of an increase in valuation for BBH, the Russian brewer 50 per cent-owned by S&N. Some traders still believe S&N could be a target for Anheuser-Busch, the maker of Budweiser. S&N closed up 4.75p at 3,530p.

Rumours of corporate activity have been rife in the City in the past fortnight, and once again shares in Lloyds TSB were well bid, rising 9p to 533p, as one leading fund manager warned clients not to be short of the stock.

Risers were few and far between in the FTSE 100 on a day when concerns over the commodities market saw the index of leading shares tumble early on, hitting a low of 5,681, down 64.9, before a partial recovery saw it close at 5,725.1, down 21.7. Mining stocks were sold heavily, as some traders talked of worries over a "trapdoor" effect of a widespread sell-off among commodity players, who are long on almost everything from copper to pork bellies.

After a year of outperformance, traders were busy taking some money off the table, and the minersRio Tinto, BHP Billiton, Kazhakmys, Anglo American and Xstrata were hammered accordingly. Rio was down 74p to 2781p, BHP closed 37p lower at 976.5p, Kazhakmys fell 32.5p to 819.5p and Anglo American dropped 75p to 2,012p.

Second-line miners also felt the squeeze on commodities, with Randgold falling 46.5p to 982p and Vedanta Resources tumbling 37p to 978p. Among smaller miners, Griffin Mining reported good drilling results from its Caijiaying site in northern China but was unable to resist the overall sell-off. Its shares fell 1.75p to 59p.

Woolworths was again well bid after yesterday's talk of WH Smith launching a bid for the group. This time the talk centred on the Icelandic investment group Baugur, rumoured to hold a 10 per cent stake in the company as well as selling down its holding in French Connection. Shares in Woolies climbed 1.25p to 35.75p as almost 65 million shares changed hands. French Connection dropped 10.25p to 250p.

Shares in the software house Autonomy rocketed as brokers and analysts warmed to Monday's record results. The chief executive, Mike Lynch, is on a roadshow, presenting to institutional investors, and it appears to have had the desired effect. Autonomy shares surged 40.25p to 469.25p to become the best performer in the FTSE 250.

The casino operator London Clubs International was also higher in heavy volume, with more than 7 million shares changing hands. LCI stock, the subject of persistent takeover rumours, rose 7p to148p.

Among smaller companies, Gaming VC rose 28.5p to 416p, a rise of 5.3 per cent, as traders and market makers said a bid could be on the way, possibly valuing the company at 550p a share.

nCipher, the software group focused on cryptographic solutions, received a bid - three weeks after the company confirmed it had received an approach. A subsidiary of its US rival Safenet has offered £86.1m for the company, valuing each share at 300p, and the board of nCipher has agreed to the deal. Its shares rallied 21p to 298.5p.

And finally, Bulletin board chat sent a number of other small stocks higher as retail investors bought into Advanced Fluids, up 0.75p to 5.25p, and Ekay, up 2.5p to 26.5p. The latter delighted investors by saying its debut results, due on 20 February, would be better than expected.