Market Report: Carillion takeover chatter boosts McAlpine

Rumours were once more building in Alfred McAlpine, the mid-cap construction services group, on a relatively quiet day for gossip. The stock soared 10.5p on chat of a 575p-per share bid from the FTSE 250 peer Carillion.

One trader said: "This story had kicked around in the past, but was doing the rounds again yesterday." The stock was unable to hold the gains, and retreated to close 0.5p down at 522p. Carillion closed up 0.25p at 420.25p

Separately, McAlpine announced its 50/50 joint venture with Costain Group had reached financial close on its Derby project, part of the Three Shires PFI scheme.

The market was initially unable to hold its 90-point bump from the previous day, slumping 64.5 in the early morning after reversals overnight on Wall Street. The miners, which had led it up on Thursday, led it back down again in the morning with Antofagasta the worst performer, shedding 3.16 per cent at 844p before rallying to close up 2p at 874. Eight of the nine worst performers were from the sector in the morning. But the FTSE 100 rallied to close up 6.2 at 6,730.7, several points off a seven-year high.

Many of the fallers were down through profit-taking, including Schroders which had been bolstered this week by speculation it would sell part of the business. It closed as the worst blue-chip performer, down 4.42 per cent at 1,491p.

Barratt Developments also suffered after a devastating note from Dresdner Kleinwort. The German broker labelled the stock "worst in class" and slashed its earnings-per-share prediction for 2008. It said: "Barratt is our biggest sell. We have seen it as an 'accident waiting to happen' ever since the Wilson Bowden deal". It fell 3.19 per cent to 699p.

Tate & Lyle continues to feel the pinch after its "Black Friday" two weeks ago, closing down 1p at 433p. Despite a management shake-up and the sale of its stake in Occidente, the Mexican cane refiner, for £46m, Investec put a hold rating on the stock. It said the unlikelihood of further management change or a takeover bid meant the shares were "getting used to life at their new level of 400-something pence".

Investors were buying into BP after the brokers threw their weight behind it. This follows the previous day's announcement that the oil major was to overhaul its organisational structure to boost efficiency. Evolution Securities said history suggests it is a good time to buy the stock; the company had risen after previous corporate changes in 1993 and 1998. It closed up 4.3 per cent at 619p.

The beleaguered lender Northern Rock finished the week on a high after reports Virgin Group was in talks over a potential takeover. The news, confirmed later in the day, sent the stock up 5.9 per cent to 273.25p.

The takeover shake-up in the life insurance industry continues to play on investors' minds. Reports of a resolution in the takeover battle for, um, Resolution intensified speculation that the Takeover Panel was set to issue a "put up or shut up" order to interested parties. This comes on the back of reports that Swiss Re was sniffing round, which helped send the shares up 25.5p to 708.5p.

Mid-tier oil companies continued to perform well, with oil prices remaining resilient and the prospect of further consolidation never far from traders' minds. Dana Petroleum was the pick of the sector, climbing 3.66 per cent to 1,304p.

Investors also backed an interim management statement from Renishaw, which closed up 3.06 per cent at 708p. The company, which designs advanced precision metrology and inspection equipment, said revenues in the first three months of the financial year were ahead of the corresponding period in 2006.

The highest second- string faller was Rank Group after it warned on profits late in the day. The group slumped 21 per cent to 125p after it blamed the smoking ban and the loss of certain gaming terminals for the "significant deterioration in revenue in recent weeks".

Autonomy was down with the market after profit-takers tucked in to its record highs from the previous day. The stock, which had risen to 999p from 917p on Monday, gave up 39p.

Down among the small-caps, Cyprotex performed well, finishing up 46.15 per cent at 4.75p. This follows a trading statement that said director confidence in its core operations had built in the third quarter.

Also up was Debtmatters, which recouped some of the devastating losses earlier in the month after it warned over the future of the IVA sector. It was up 34 per cent at 23.5p.

A bid approach sent the metals tester Inspicio up 15.18 per cent to 220p. Elsewhere, EMER International is in talks with the suspended stock Global Marine Energy, which could lead to a 13p-per-share bid. The mechanical handling equipment producer was suspended last month with its shares at 9.38p following talks over a reverse takeover.