Market Report: Quintain Estates in the takeover spotlight

Takeover talk at Quintain Estates & Development hit the markets with renewed vigour yesterday, and for the first time in months investors believe it could carry weight. Shares in the property group were among the highest risers on the second tier, after an 8 per cent stake changed hands at 920p. The parties involved were unknown, but one well-placed market source said the seller was none other than Paul Kemsley, chairman of Rock Property and vice-chairman of Tottenham Hotspur.

The move would be a surprise as Kemsley had been linked with an offer for Quintain since his stakebuilding drove its shares to record highs of 964p in February. The company's value has slid ever since, despite intermittent bid chat, until yesterday. Trading volume rose aggressively in the wake of the trade and it closed up 50p at 880p.

Mining stocks, as so often this month, were the stellar performers among the blue chips. The top four risers on the top tier were all mining stocks, including Vedanta Resources and the perennial headline grabber Xstrata, with BHP Billiton topping the lot, up 3.69 per cent at 1516p.

The move came off the back of a bullish note from Credit Suisse, which backed the sector to continue performing strongly. It said: "We structurally prefer mining ... Valuations do not look expensive and speculators and investors are noted as short."

The broker added that commodity prices will remain positive, while mergers and acquisitions would also support the market. One specialist trader said: "The report proved that despite the phenomenal growth story in the sector, these companies are not overpriced."

Even Rio Tinto closed up, despite trading down for most of the day following speculation it is set to wade back into a potentially costly takeover battle for Canadian rivals Alcan.

The sector has been awash with tie-up talk, the most spectacular of which involved Rio last month. Its shares spiked after rumours hit the Australian market that it was in takeover talks with BHP, in a deal that would have been worth over $100bn. Both companies quickly distanced themselves from the speculation.

The FTSE 100 opened strongly, recouping the previous day's losses. Traders' caution about the US proved to be misplaced, and the top tier closed up 54.9 points at 6690 points. Traders complained of little news flow influence on the index, instead pointing to the strength of the mining, banking and oil sectors. Shell was the biggest riser in oil after prices hit an eight-month high. Shares in the group closed up 52p at 2167p.

Disappointed investors backed away from ICI as the takeover panel issued a "put up or shut up" to rival Akzo Nobel. One trader said Akzo would be loath to up its rejected 600p-per share offer, although several noted it did not immediately walk away. The paint group finished the day 5p down at 615p.

Another blue-chip stock to suffer was Severn Trent, the water group, following talk it had failed to hit its targets to prevent leaking. The group, which has been fined its for customer service performance, saw its share price drain 16p to 1359p at the close.

Meanwhile, one of the mid-tier's big risers was coming close to solving its structural issues. Cairn Energy's stock leapt 104p to 1872p as traders picked up on rumours coming out of India that it had resolved problems relating to pipelines in the region.

Bullish half-years from SIG had the market flocking to buy, driving it up 8.4 per cent to 1458p. The construction group revealed trading was "substantially" ahead of the first half of 2006. The company added that its total sales had exceeded £1bn for the first time in a six-month period.

EasyJet remained grounded after disappointing revenue data for June. Shares fell 14.25p to 516.5p after Deutsche Bank said it estimated revenue per seat was down 10 per cent, four percentage points higher than it had expected.

Rumours abounded among the small caps that Sir Tom Hunter was stepping up his battle with Tesco for control of Dobbies Garden Centre. Hunter built his stake to over 25 per cent following a series of dawn raids last month, paying up to 1580p per share, with speculation that he hadn't finished there. Dobbies closed up 12.5p at 1587.5p

More trouble for the former England cricketer Phil Edmonds' oil and gas vehicle White Nile. Shares slumped after it said it was seeking clarification concerning its stake in an oil field in Sudan. Shares closed down 17p at 90p.