THE market ended its last full day's trading before the Christmas break in festive mood, closing on a record high.

However, trading remained lacklustre, with many key investment players in the City beginning their holidays early.

The FTSE index of the UK's top 100 companies slipped almost 11 points first thing, before staging a modest recovery in which it clawed back lost ground to stand up 9.6 at 4087.2 by the close of dealing.

The insurance sector was still alive with takeover excitement, even though no bid has actually emerged.

General Accident rose 10p to 770p, while Commercial Union, which had fallen back over the past few days, nudged Vip higher to 6871/2p.

Fund manager Mercury Asset Management, which had a good run in anticipation of it joining the FTSE stocks, succumbed to profit takers when it finally arrived and lost 15p to 1236p.

The news sent rival Airtours up 41/2p to 803p, while First Choice Holidays added up to 70p.

Moves by engineering group Eurovein to sell its surface treatment division for £12 million went down well in the City with the shares rocketing 211/2p to 761/2p.

Confirmation by Sears, the Selfridges to shoe shops group, that it is in talks to sell the Freemans home shopping business to Littlewoods, pushed Sears up 1/2p to 891/2p.

Midland Bank parent HSBC added 11p to 2931/2p after announcing plans to strengthen its presence in the Middle East.

Christmas cheer gave the brewers and drinks groups a lift. Bass added 21/2p to 8171/2p and Whitbread widely tipped in the weekend press gained 91/2p to 781/2p, while Allied Domecq bubbled up 14p to 4391/2p.

Defence and car parts group GKN again reflected last week's news that it is facing a hefty damages bill after losing a US court case. It slipped 6p to 9861/2p.

The finance director of car components and diesel engine group Lucas Varity has resigned following the merger of Britain's Lucas Industries and America's Varity Corporation earlier this year.

Earlier this month it announced large scale restructuring including plans to shed 3,000 jobs worldwide over the next two years. LucasVarity's shares lost 6p to 2261/2p.

Furniture and furnishings group Thomas Jourdan soared 4p to 261/2p on growing speculation that it will soon receive a takeover offer.

In contrast, Brake Bros, a food supplier to the catering industry in the UK and France, issued a profits warning.

The company believes pretax earnings in the year to the end of December will be around £24 million, below market forecasts and down on the previous 12 months when it made £27.1 million. The warning sent the shares sliding 178p to 577p.

Growing indications of booming sales in the High Street in the run up to Christmas sent Marks & Spencer 61/2p higher to 479p and Boots up 21/2p to 599p, while Kingfisher, the Comet to Woolworth group, rose 6p to 6181/2p.

Ceramic tiles specialist Fired Earth reported record sales in four consecutive months between July and October. The news set the shares alight, up 7p to 1041/2p.

Board changes at wire rope maker Bridon were well received with the group 31/2p up to 1021/2p.

A deal arranged by a subsidiary of British Borneo Petroleum in the Gulf of Mexico went down well with the shares up 161/2p to 759p.

OGC International, which supplies services to the oil and gas industry, gushed 41p to 116p after announcing a bid approach.