Market Report: A buzz of telecoms rumours livens up a dull day

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Even on a dull day telecoms continued to mesmerise the stock market. The suspicion that corporate action will shortly emerge kept many of the leading players on the high wire, with a range of sometimes wild rumours buzzing around.

Orange led the way. The mobile telephone group gained 9.5p to a 345p peak ahead of the expected British Aerospace sale of its 21 per cent stake. A Continental group is thought to be the most likely buyer.

Cable & Wireless was under the influence of keen anticipation, with Hong Kong developments and the possibility of a BT bid pushing the shares up 12p to a 642p high, although BT could only manage to dial a 3.5p advance to 569.5p.

Vodafone was another ringing a new record, up 6p to 520p. There were vague suggestions that it could put Ionica, the struggling radio telephone group, out of its misery with an 85p a share bid; the alleged target responded with a 6.5p fall to 72p.

Securicor, 3.5p firmer at 367.5p, was helped by a revival of rumours that it is near to selling its 40 per cent stake in the Cellnet mobile telephone group to BT, which would, ran the story, clear the way for Rentokil, up 12.75p to 292.75p, to strike at Securicor.

Rentokil is immersed in bid rumours these days. The environmental and property services group was last week linked with the Compass contract catering group and was yesterday said to be looking at a Danish company, International Service System, a cleaning and maintenance services operation.

Footsie, at one time up 33.4 points, ended off 5.4 at 5,607.9 in rather lacklustre trading. The rest of the market was a little more responsive with the supporting indices edging to new highs.

A recurrence of interest rate worries and New York's inability during London hours to build on its peak were the main inhibiting influences.

Still Kingfisher, running the Woolworths and Superdrug chains, was unruffled as a third investment house hoisted a 1,100p target. Salomon Smith Barney moved to 1,100p, partly on the back of B&Q's strong position in the robust do-it-yourself market and the prospects for Darty, the French chain. SG Securities and Morgan Stanley had already moved to 1,100p and 1,105p respectively. The shares rose 28p to 1,044p.

IT shares lost some of their exuberance on the blows inflicted by JBA and, less directly, City Technology. JBA almost halved to 632.5p after warning profits would be around pounds 5m against hopes of up to pounds 16m. City Tech, a gas sensors group, returned from suspension at 180p, off 28.5p. US problems forced a pounds 5m provision and axing of the interim dividend.

It was enough to prompt a 45p fall to 1,315p by Logica and 45p to 2,195p by Misys.

Heal's, the furniture retailer, rose 10p to 182.5p on a cheerful trading statement but Monsoon, the fashion chain, endured a surprisingly ragged debut, closing at 191.5p against the 198p placing. Body Shop International's discomfort over the departure of its US chief continued, with the shares off 4.5p to 111p.

Takeover bids still flowed. British Dredging jumped 26.5p to 152.5p after an approach prompting one market man to observe that if such a bewhiskered old candidate can get a bid then "this market must be on bid alert". Property group Five Oaks hardened 5.25p to 39p as Milner Estates, up 2.5p at 317.5p produced an agreed pounds 40.5m offer. Chesterton, the property agent, was suspended at 36p (up 3p); it has agreed a reverse takeover by rival Summit. But Cookson lost some of Tuesday's speculative rise, off 7.5p to 209.5p.

Granada, commencing a series of investment presentations, edged forward 3.5p to 908.5p and Reuters improved 7p to 579p ahead of an investment dinner hosted by Henderson Crosthwaite for 16 fund managers.

Some utilities firmed as Robert Fleming suggested the current government review could add 10 per cent to the sector by making regulation more predictable and "less of a political football". The investment house favours National Power and United Utilities.

Little Criterion Properties rose 9p to 88.5p after forging a pact with a US investment company Oaktree which has funds of $10bn. The partnership intends to invest in high yielding office properties.

Capital Industries edged forward 1.5p to 130p. There is talk that Rutland Trust could sell its 39 per cent stake in the laminated paper and foil container group to a US company, thereby triggering a bid. Rutland's yearly shareholders meeting takes place tomorrow.