Market Report: BOC slips as chemicals giant says it won't bid

Inevitably this weighed on BOC shares, which finished the day as one of the worst performers in the FTSE 100, down 18p at 1,092p. Juergen Hambrecht, the BASF chief executive, bluntly ruled out the possibility that his company would buy BOC. Mr Hambrecht is reported as saying: "As a general rule I don't comment on such matters, but in this case I want to say clearly no."

Although some pointed out that the management of Deutsche Post had played down rumours that the company planned to acquire rival Exel just months before tabling an offer for the UK logistics group, analysts argued that BASF will not be able to do the same given the unequivocal nature of Mr Hambrecht's statement.

There was also a lot of financial pain for all those investors who bet on a counter-bid for O2. Shares in the mobile phone group dropped 11.75p to 197.5p after Deutsche Telekom said it had no plans to trump Telefónica's offer for the group.

Nevertheless, these disappointments did not cool investors' ardour for takeover stories. BG Group, up 11p to 528p, was again tipped to be bought by Royal Dutch Shell, down 19p to 1,819p. Misys jumped 8.5p to 214p on hopes that the software group will soon be swallowed by a larger rival.

In the retail sector, gossips continued to talk about a possible 45p-a-share offer for Woolworths, up 1p at 33.5p, from a private-equity house.

Rumours that a private-equity player is also running the slide rule over WH Smith pushed its stock 7.25p higher to 376.25p. As with Woolworths, a financial buyer has in the past admitted to being interested in buying WHS only to walk away from the company after a careful look at its books.

Hilton Group added 9p to 350.5p as ABN Amro suggested that the planned sale of the group's international hotels unit is likely to significantly boost the value of its shares. The Dutch broker believes a disposal of the business to HHC, the US group from which it was split in the 1960s, could be announced before the end of the month. It calculates that such a deal will raise 220p a share in cash for Hilton Group. When this is added to the 190p a share its betting chain Ladbrokes is worth, one gets a 410p valuation for the whole of Hilton Group. This leaves plenty of upside for investors even at current levels.

As for London's indices, the FTSE 100 rose 14.3 points to 5,358.6 while the FTSE 250 gained 96.2 points to 7,873.3. Investors were buoyed by a strong start to trading on Wall Street where the Dow Jones and the Nasdaq gained ground.

Elsewhere, Autonomy rose 1.5p to 313.5p amid talk that today's third-quarter results will be accompanied by a sizeable acquisition and rights issue. If you believe yesterday's dealing room gossip, the IT services group will be looking to raise as much as £200m to fund its latest purchase.

JP Morgan was downbeat about Invensys, unchanged at 13.75p, before today's third-quarter results from the engineer. The US broker reiterated its "underweight" stance on the stock and told its clients that the company's cash flow performance will be key for the performance of its shares in the wake of the results.

Bellway, up 26.5p to 908p, saw its chairman, Howard Dawe, cash in on some of his share options. Mr Dawe exercised options to buy 65,000 shares at 468p and then immediately sold the stock in the market at 895p. He made a profit of £277,000 from the transaction.

Among smaller companies, Porvair jumped 4.5p to 115.5p after a slew of director share purchases. John Morgan, the chairman of the group, led the way as he picked up 50,000 shares at 110p while Christopher Tyler, the finance director, bought a more modest 4,500.

Meanwhile, DataCash held steady at 111.75p as Gavin Breeze, an executive, pocketed £880,000 from the disposal of 800,000 shares at 111p. Even after the sale, Mr Breeze remains the biggest shareholder at the payment services group.

Finally, Northern Petroleum put its recent disappointment in the Isle of Wight behind it yesterday and registered a 4.5p rise in its shares to 50p after the company was officially recommended to take on the Papekop oil and gas production licence in the Netherlands. The field is believed to contain more than 20 billion cubic feet of gas and 10 million barrels of oil. Northern should generate substantial profits from this project.