The FT-SE share index finished 14.9 points higher in moderate trading that did, however, embrace selective nibbling by some of the larger institutional shareholders.
The latest clutch of corporate results and Whitehall statistics were sufficiently uneventful to help sentiment, and the fear of higher interest rates receded after the Halifax Building Society reduced saving rates, rather than increasing mortgages.
Water shares also contributed to the change of mood. The keenly-awaited Ofwat report was much milder than some had feared, heaping much of the cost of improving the quality of water on the consumer.
Consequently Anglian Water jumped 13p to 406p; Thames Water 19p to 413p, and Yorkshire Water 20p to 438p.
Sears, the retailing group, also attracted keen attention; but for the wrong reasons. The shares, it seems, were the subject of a vigorous bear raid. Market-makers and fund managers received the now traditional brown evelopes containing bleak messages of deep difficulties.
Briefly the shares were down to 62p. But they quickly recovered when it became clear the raider had little financial knowledge. Said one analyst: 'It was most weird, even unreal. It was the most amateurish attempt yet to undermine a share.' The Stock Exchange is thought to be investigating.
Sears ended the session unchanged at 67p. Trading was often brisk with Seaq putting volume at 12 million.
The oil group Lasmo came in for another speculative run. Trading was again heavy with keen US ADR buying prompting the shares to advance 10.5p to 147p.
Takeover talk has been gathering strength for some time. Earlier this week the RTZ resources group, suffering from the weak US dollar, was thought to be interested. Others linked with the group, down from 315p since it launched its controversial but successful bid for Ultramar last year, include Shell and the French Total and Elf Aquitaine groups.
Enterprise Oil had an uncertain session, recovering some of the lost ground towards the close as a hovering line was absorbed. The price, at one time down 11p, closed 7p lower at 348p.
Barclays, the banking group, dropped 12p to 290p as SG Warburg questioned whether the final dividend will be held. The insurance broker Sedgwick Group was another caught by dividend fears, down 17p to 141p. Interim figures are due next week. Albert Fisher, the fruit and vegetable group, also felt the impact of dividend fears, down 1.5p to 34p.
Although most building and related shares made headway Tarmac had to endure a 2p fall to 59p.
Its discomfort stemmed from Leigh Interest's decision to abandon plans to buy Econowaste, which Tarmac wants to sell. It is assumed that price was the obstacle. Tarmac is thought to be seeking more than pounds 100m. One of the water companies is now regarded as the most likely buyer.
Tate & Lyle, up 9p to 310p, was thought to be inspired by Barclays de Zoete Wedd, but Cadbury Schweppes suffered from a Smith New Court downgrading, losing 13p to 442p.
Saatchi & Saatchi continued to draw strength from US interest, advancing a further 7.5p to 157.5p. Medeva, the drugs group reporting interim figures next month, was also helped by US support, gaining 10p to 162p.
BM Group ran into late selling, falling 15p to 86p. The engineer WB Industries improved 1p to 22p after it announced talks that may 'lead to a reshaping of the group'.
The hotelier Queens Moat Houses continued to suffer from its poorly-received interim figures. The shares fell 6p to 51p. They have fallen 14p since Wednesday's declaration. Trading was again heavy with Seaq putting volume at 22 million. Forte was again down in sympathy, off 3p at 127p.
Acorn Computers put on 2.5p to 33.5p. A successful presentation of a new range was apparently made to trade customers, ahead of a launch planned later this month.
The market has high hopes of a pocket computer that Acorn, controlled by Olivetti of Italy, has developed.
After plunging into interim losses Acorn staged a recovery in the second half, ending its year with a pounds 270,000 profit. In the previous year profits were pounds 1.6m.
The FT-SE share index rose 14.9 points to 2,318 yesterday. At one time it was sporting a 20.6 gain. The FT 30 share index was 6.9 higher at 1,722.2. Trading did not match the more heady performance. Turnover was 441.3 million shares with only a little over 17,000 bargains completed
Shares of Next, the revitalised retailer, rose 2.5p to 81p yesterday as the market latched on to a story that it planned to sell its near 1 per cent stake in BSkyB for about pounds 30m. Morgan Stanley's Julie Ramshaw, who believes the shares should go to 125p, points out that Next has pounds 35m in cash and has no pressing need to sell. She expects profits of pounds 25.5m this year.
British Land is within a whisker of triggering a bid for the Five Oaks property group. It has picked up another 140,000 shares, lifting its stake to 29.998 per cent. Five Oaks stuck at 20p. Like many it has suffered in the property slump, but in the second six months of last year it cut its loss from pounds 7.9m to pounds 371,000. BL, up 5p at 164p, arrived on the Five Oaks scene in December.Reuse content