With the Dow Jones Average under pressure, leading shares quickly lost their exuberance. However, a late rally, leaving the index 35.4 points higher at 6,201.8 by the close, held out hope it would not be completely dominated by the behaviour of the DJA. At one time up Footsie was up 66.6.
But the stock market undercard once again displayed its resilience. The mid and small cappers made progress, with the tiddlers showing yet more determination to overtake their record high, hit last year.
Among the Footsie constituents, Securicor was little changed at 583p although trading was again brisk. It appears opposition is surfacing to the pounds 3.15bn sale of its 40 per cent interest in the Cellnet mobile phone operation.
Some institutional shareholders are agitating against the deal, claiming Securicor should have been able to wring a far better price from Cellnet's controlling shareholder, BT.
According to one source, shareholders representing more than 10 per cent of Securicor feel Cellnet is being sold too cheaply. Comparisons are being drawn with the much more impressive price Deutsche Telekom agreed to pay for One-2-One which has half Cellnet's subscribers.
Of course Securicor's negotiating position was undermined by the unlikelihood of any buyer emerging other than BT. Its shareholders, who have been promised most of the BT cash, are due to vote on the deal in October.
National Power, for long depressed, enjoyed the rare distinction of being one of the leaders of the Footsie leader board, with a 22p gain to 448.5p following the sale of its Drax power station in Selby, North Yorkshire. The deal is thought to be worth up to 20p a share and much of the cash may be handed to shareholders. Rival PowerGen was sufficiently inspired to generate a 20p advance to 590p.
Imperial Chemical Industries was one of the laggards, off 35p at 749p, as the failure of expected disposals to materialise unsettled sentiment. Rentokil Initial, off 11p to 236p, had suffered one of the worst Footsie constituent falls following results.
Banks were in better form, reflecting a steadier financial showing in New York. But Deutsche Bank did its best to undermined the rally, downgrading some of its recommendations. Underperforming Halifax was upgraded and gained 13.5p to 667.5p.
P&O, spurred by a Morgan Stanley target price of 1,200p, cruised ahead 35p to 1,017.5p.
Takeover action, real and rumoured, made its inevitable contribution to the proceedings. Scottish Highland Hotels hardened 4.5p to 128p as the signalled bidder, offering 130p a share, emerged as active venture capital fund, Alchemy Partners. It is bidding through its Paramount Hotels off-shoot.
Coca-Cola Beverages lost a little fizz, off 1.5p to 127p, as it finalised its merger terms with the Greek Hellenic Bottling Co; Emess, the electrical equipment group, surged 7.5p to 34.75p after signalling a bid approach, and Workplace Technology, admitting takeover talks had reached an "advanced stage", romped ahead 68p to 213p. Internet Technology was another to confirm bid talks, networking a 34.5p gain to 201p.
Slug & Lettuce, the pubs chain, remained at the bid pumps as speculation of a strike sent the shares frothing 15p to 178.5p. SFI, formerly Surrey Free Inns, has ruled itself out of the running but the market is convinced the bar room musical chairs has still to run its course. The Slug & Lettuce chain has been under performing most managed pub chains. But a recent set of figures was ahead of expectations. Buy advice from stockbroker Teather & Greenwood added to the heady atmosphere surrounding the shares.
Break for the Border, the nightclub group, is another where hopes of corporate action linger. It failed earlier this year to merge with the highly successful Ofex-traded Po Na Na chain of late night, North African themed bars. Since then Po Na Na has acquired the DP night club business and is moving up market to AIM.
First Leisure, which has this week sold its ten pin bowling operations to Allied Leisure, improved 7.5p to 227.5p on talk a nightclub sale was near; Northern Leisure, unchanged at 187p, is the favourite to increase its dancing operations. Allied, which earlier acquired European Leisure, rose 3.5p to 30.5p, a 12-month high.
The rumour mill was not confined to the smaller companies. Insurance group Legal & General has encountered persistent speculation this week, gaining a further 7.25p to 166.25p. And even BT, weak lately, dialled a 17p gain to 950p after chief executive Sir Peter Bonfield told a German magazine he would not rule out a bid for the telecom giant.
Hamleys, the toys retailer, produced more profits gloom and fell 25p to 136.5p. Bodycote, an engineer, lost 29p to 391.5p after figures failed to exceed best expectations. The group, regarded by some as a bid target for TI, said it had not received any approach.
Thames Water fell 18p to 842p, the lowest for more than a year. There was also some anxiety among insurers although it became clear GCU has little exposure and gained 18p to 934.5p. Royal & Sun Alliancefirmed 8.5p to 514.5p.
Rolls-Royce, weak lately, firmed 8.75p to 258.5p and Smith Industries, reflecting Warburg Dillon Read support, rose 15.5p to 1,000.5p.
Reuters, the information group which is joining the stampede to on-line share trading, was in demand.
Goldman Sachs appeared to lead the chorus of support for the move which will allow E-Trade, the US Internet broker, to use Reuters' Instinet trading platform to offer its 1.2 million investors after-hours trading facilities. The shares rose 17.5p to 923p. Freeservehas reached a trading agreement with three partners. Its shares shaded 2p to 206p. The question remains whether enough investors will be interested in what will be cut-price exercises.
Nycomed, the medical group, had a healthy look after declaring a large US order for its MegaBace DNA sequencers. The shares added 24.5p to 405p. SmithKline Beecham was also in demand, up 21.5p to 765.5p, after Lehman Brothers made positive noises.
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