Market Report: Sage tops risers after fresh talk of takeover

On a second day of the market being smashed by the Northern Rock runaway train, traders spent much of the day guessing who would be next.

There were only a handful of stocks limping into positive territory by the end of the day. After a recurrence of takeover talk Sage Group topped the list, up 2.77 per cent to 250p. There had been speculation last week that Infosys was set to bid, but the name doing the rounds last night was Cap Gemini. Sage was bolstered by a bullish note from Deutsche Bank. The broker said: "Sage represents a safe haven in our view in the context of the sector and the valuation is undemanding."

Unsurprisingly, top of the fallers was Northern Rock as last week's tailspin intensified. The bank, whose shares were valued at more than 1200p seven months ago, lost 40 per cent of its value at one point, before staging a slight rally. The brokers deserted in droves with Dresdner Kleinwort, Lehman Brothers and Citigroup all slashing their price targets. Prize for the riskiest call goes to Goldman Sachs, which released a note yesterday morning saying: "We believe that this news will be taken negatively and that questions are likely to be raised regarding the business model." Northern Rock closed down 35.45 per cent at 282.75.

Not far behind was Alliance & Leicester which fell almost a third to 600p as rumours did the rounds that it would be the next on the list to ask for help. One trader said: "This has been massively oversold in my view."

Simon Denham, managing director of spreadbetter Capital Spreads, said the banking sector heavy weighting meant all eyes were on the next domino to fall. He said: "If a bank with absolutely no actual bad debt can effectively go under, a whisper here or rumour there may do the same for a much bigger fish if the Bank of England is not careful."

There were few risers as investor fears over the banking crisis dragged the market down. The FTSE 100 slumped 106.5 points to close at 6,182.8. Another sector to suffer was the retailers with Home Retail Group the worst hit, down 5.76 per cent at 376.5p.

Investors were tucking into Northern Foods, which soared off the back of a note from Panmure Gordon. The broker said Northern looks set to transform its returns to investors with the focused portfolio, a new management approach and an active focus on capital management. It raised its recommendation to "buy" backing, which sent the shares up 4 per cent to 97.5p. At the other end of the scale, Gyrus Group slumped 8 per cent after it missed estimates on its interims. Adjusted operating profits were up 2 per cent to £17.5m after manufacturing efficiencies and a hit from the weakness in the dollar.

One stock that came into potential takeover focus once more was SIG, whose shares slumped 121p in early morning trading.

Traders were backing the construction company as a strong buy yesterday, saying the stock had been oversold - the losses were rumoured to be a forced seller due to a stop loss being reached - and on talk of potential interest from Saint Gobain, which had first done the rounds before the summer. The stock rallied, helped by the chief executive and financial director buying shares, and it closed down 15p at 1146p

The property sector is also feeling the pinch of the recent turmoil, and Merrill Lynch's downgrade of Minerva to "sell" from "buy" did indeed spark a sell-off. The broker said the group has been slow to de-risk its London property projects. The stock closed at 230.75p. One trader said: "There is definitely value there, but at the moment no one is willing to chance their arm."

Among the small caps, Playwize hit the jackpot after signing a deal to provide Ladbrokes with its online 3-D poker system. Shares in the tiny software developer doubled, closing 1.25p higher at 2.5p, the top of the growth stocks.

Another riser was Target Resources a diamond and gold mining company in Sierra Leone. Despite the country being the setting for last year's Blood Diamond, it was an entirely different film that had investors piling in, as it signed a deal with Tiffany & Co. Holly Golightly's favourite jewellery store agreed to invest $5m in Target, saying it was part of its strategy to invest in companies that "ethically mine high quality stones". Target rose 13.33 per cent to 25.5p.

Elsewhere, while Central African Mining rebounded after its recent problems in the Democratic Republic of Congo, Brinkley Mining went the other way. It closed down 25.37 percent at 12.5 on speculation the government was set to revoke its uranium mining licenses.

Today sees Kurawood on AIM. The company which treats softwood to create the consistency of hardwood, has raised £4.5m, to debut with a market cap of some £17m.

News
people'It can last and it's terrifying'
Sport
Alexis Sanchez, Radamel Falcao, Diego Costa and Mario Balotelli
football
Sport
Danny Welbeck's Manchester United future is in doubt
footballGunners confirm signing from Manchester United
News
people Emma Watson addresses celebrity nude photo leak
PROMOTED VIDEO
Sport
footballFeaturing Bart Simpson
News
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
Arts and Entertainment
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
News
Kelly Brook
peopleA spokesperson said the support group was 'extremely disappointed'
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Sport
Andy Murray celebrates a shot while playing Jo-Wilfried Tsonga
TennisWin sets up blockbuster US Open quarter-final against Djokovic
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Hare’s a riddle: Kit Williams with the treasure linked to Masquerade
booksRiddling trilogy could net you $3m
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
News
news Video - hailed as 'most original' since Benedict Cumberbatch's
News
i100
Life and Style
The longer David Sedaris had his Fitbit, the further afield his walks took him through the West Sussex countryside
lifeDavid Sedaris: What I learnt from my fitness tracker about the world
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Planning Manager (Training, Learning and Development) - London

£35000 - £38000 per annum + benefits: Ashdown Group: A highly successful, glob...

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

SQL Implementation Consultant (VB,C#, SQL, Java, Eclipse, integ

£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...

Head of IT (Windows, Server, VMware, SAN, Fidessa, Equities)

£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering