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
Sport
FootballGerman sparks three goals in four minutes at favourite No 10 role
News
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
Sport
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
athletics
PROMOTED VIDEO
Sport
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
music
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
New Articles
i100... she's just started school
News
news
News
ebooksAn unforgettable anthology of contemporary reportage
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
New Articles
i100... despite rising prices
Voices
Holly's review of Peterborough's Pizza Express quickly went viral on social media
voices
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

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam