Markets: Up

Diageo was the best-performing stock in the FT-SE 100 last week, rising 10 per cent. That was a recovery from the previous week when the shares fell 10 per cent after the world's largest liquor company said profit in the 12 months ended June fell 4.5 per cent because of the strong pound and recession in Asia.

This week investors reassessed the outlook for the company. They are pleased that the company, formed after a merger between Guinness and Grand Metropolitan, will save pounds 290m next year as a result of the deal - 50 per cent more than anticipated. "The cost savings were better than expected," said Mark Puleikis, an analyst at Merrill Lynch.