Market Report: Fresh Mexican bid talk is a fiesta for Hanson

Persistent bid talk at the start of the year, combined with hopes that the company may demerge its US business, sent Hanson shares up to almost 800p in April. Since then, the company has played down bid talk, and fears over the stuttering US housing market brought the stock back down to earth.

The rumour yesterday was that Cemex, the Mexican cement giant, is once again mulling an offer for Hanson to boost its position in the global aggregates market. Cemex is worth almost exactly double Hanson's current market capitalisation, and could sell off some of Hanson's non-aggregate businesses to ease the pain of a major acquisition. Hanson shares jumped 27p to 677.5p, while Wolseley, another UK blue chip with significant exposure to the US building industry, added 30p to 1,148p thanks to a positive read-across from Hanson.

It has been a dire week for Man Group's flagship AHL Diversified Futures Fund, which is heavily invested in the mining industry and produces about 13 per cent of Man's total group profits. The fund fell 2.4 per cent last week, one of its worst weeks of the year. Man Group shares fell 10.75p to close at 432.75p.

In the wider market, better-than-expected results from the weapons maker BAE Systems and the retailer Next failed to spark a rally in the FTSE 100, which closed 3.3 points worse at 5892.2, despite the strong performance from the Dow overnight. BAE closed 2.75p worse as it revealed that it missed its pension fund return target by £217m, while Next soared 129p to close at 1,834p, an all-time high.

A disappointing trading update from the holiday group MyTravel sent the shares 40p lower to 160p in early deals, as the company revealed that a combination of fuel costs, foreign currency losses and the recent terror alerts would wipe £50m off pre-tax profits. The broker UBS placed a line of 13.5 million shares on behalf of a mystery seller in the market at 182p. The shares closed 12.75p worse at 188p, while the rival First Choice suffered in sympathy with an 8.5p decline to208.25p.

The fund manager Schroders continued to slide after being relegated from the blue-chip index last week. The shares fell another 10p to close at 914p, 28.3 per cent below the high for the year and a substantial underperformance in comparison to the wider market. Traders said if the share price loses more ground, bid talk for the venerable City institution is inevitable.

AWG, the Huntingdon-based water and support services group, got tongues wagging late in the session as talk of a bid for the group did the rounds. The shares surged 44p to 1,362p, with some traders speculating that a private equity bidder is poised to offer 1,450p per share for the company, valuing the group at a little more than £2bn.

In the small caps, the virtual telecom network operator Vanco surged 40p to 440p, after a large seller was cleared out of the market on Tuesday. The group is due to report interim results on 26 September, and the word is that the numbers could beat forecasts. The house broker Dresdner Kleinwort reiterated its 700p target for the shares on Monday.

Sticking with groups that are likely to beat forecasts, Dignity, the funeral operator, is due to report interims today and once again traders are expecting it to exceed expectations. The shares, down 9.75p yesterday to 591p, have gained 25 per cent since the start of July, so the results must be good if severe profit-taking is to be avoided.

Rumours of margin calls forced World Gaming 6p lower to 49p, even though it is still officially in takeover talks with Sportingbet. The word is a number of brokers have taken the stock off their margin-eligible lists after a recent volatile performance, forcing sellers to dump the shares. Even if the Sportingbet bid materialises, it is likely to be at a substantial discount to the £56.6m value indicated last Friday.

The word among small-cap traders is there is more good news in the pipeline from the biotech minnow Antisoma, on the back of a string of encouraging announcements, although the shares were unchanged yesterday at 15.25p. Its anti-cancer antibody, AS1402, has produced good test results and the company is thought to be looking for a partner to create what could be a blockbuster treatment.

Finally, there was an encouraging start to life as a publicly quoted company for Weather Lottery, after an introduction by the broker SVS Securities. The stock closed at 9.5p, a 20 per cent premium to the 8p introduction price.