Expectations of a US strike provoked the surge. The giant AT&T is regarded as the most likely predator.
The Cable excitement followed renewed speculation BT was about to mount a bid. It is known BT had sought, and apparently failed, to win Whitehall clearance for a strike. But discussions between the two continued. Cable admitted it had been involved in talks which had terminated.
The market seized upon the Cable statement as an admission it was ready to do a deal. With its boardroom weakened by the abrupt departure of Lord Young, chairman, and James Ross, chief executive, the telecommunications giant is seen as vulnerable to a determined strike.
Its current capitalisation is around pounds 10.5bn. But it has been clear for a long time that the group is undervalued on a sum-of-the-parts calculation. Its controlling stake in Hong Kong Telecom creates much of the confusion. Some believe to accommodate HKT's true valuation Cable could command a price tag of more than pounds 20bn.
AT&T could, perhaps, match such a demanding valuation. But it could stretch BT, with a market worth of pounds 22.8bn.
However an AT&T bid could force BT's hand. It is already under intense pressure from Oftel and could see Cable as offering an escape route from the continuing harassment of the industry regulator.
The view is any bid would ultimately be a break up shot with at least a reduced involvement in the Hong Kong operation a distinct possibility.
The market trend and the possibility of a share exchange bid was too much for BT shares, off 2p to 361.5p.
The market was under the shadow of New York. Friday's slump was too frightening even for a seemingly decoupled London and at one time the FT-SE 100 index was down 81.2 points. But New York, although volatile, put on a brave display and Footsie closed 35.8 points down at 3,674.5.
The feared wave of selling failed to materialise and talk of another Black Monday proved to be wide of the mark.
But the market remains exceedingly tender. A two day decline of more than 80 points, following the expected interest rate cut, illustrates its fragility. Yet if New York continues its recovery, shares could bounce strongly today.
One influence which should not be overlooked is this week's Cheltenham race meeting, a notorious magnet for many of the City's big hitters. Trading during Cheltenham week is often lacklustre although the more nervous international atmosphere now evident could this time keep many traders on their toes.
Cable was not the only blue chip to survive the storm. Management changes lifted Rank Organisation 11p to 490p and shares with high dividend yields, such as Hanson and Thames Water, had little difficulty taking the strain.
Allied Domecq frothed 5p to 508p. Its pounds 150m pubs expansion was seen as an indication it could be near to completing the sale of its troubled brewing division, Carlsberg-Tetley.
Its brewing involvement restricts the size of its pubs estate. But once Allied is free of the Carlsberg-Tetley tie there will be no ceiling on its retailing operations. Bass and Whitbread are the favourites to pounce. Although its ADRs were strong, Bass suffered a 7p fall to 755p; Whitbread lost 5p to 696p.
Banks and insurances were among the major casualties. Standard Chartered, high lately on takeover speculation, fell 29p to 586p. It was also ruffled by the slide in the Hong Kong share market which lowered HSBC 41.5p to 1,005.5p; General Accident fell 22p to 620p.
McKechnie, the engineer, survived the gloom, gaining 1p to 472p. Credit Lyonnais Laing think the shares deserve to be higher. The shares fell because of cautious statements but the reaction was "unnecessarily alarmist". Profits should climb pounds 7m to pounds 52.3m this year and reach pounds 62m next.
Costain, the builder, lost 11.5p to 79.5p. It rebutted takeover talk, which lifted the shares last week, and completed a demolition job by saying losses would be more than forecasts which approach pounds 20m.
Memory Corporation had another eventful session. Although off their low they closed 13p lower at 142p; they were 553p in September.
Alvis lost 2p to 153.5p despite talk of a GKN bid and Aberdeen Trust firmed to 136p as speculation of a Commerzbank offer strengthened.
rCelsis International, one of the bio babes, resisted the slide. It was helped by the granting of a European patent for its digital system for detecting and counting low levels of microbial contamination in liquids. The world market for microbial contamination is estimated at $4bn. The shares rose 5p to 107p.
rCavaghan & Gray, which supplies chilled foods to Marks & Spencer, eased 1p to 105p. Started in 1912 it came to market in December through a reverse takeover of the ailing Dalepak food business.
With Dalepak said to be responding to the C&G touch the shares could be undervalued. Williams de Broe, the stockbroker, expect profits of pounds 500,000 in the year ending this month, climbing to pounds 9.3m next year.