Persistent suggestions that Barclays was on the verge of a deal with Credit Suisse First Boston lifted the shares 13p to 1,506p and a growing belief that Deutsche Morgan Grenfell could, despite denials, be tempted to increase its offer for NatWest's equity and research division pushed its shares 21p higher to 878p.
The Swiss group, the last still expressing any interest, was thought to have tabled a bid for Barclay's unwanted BZW arm. There was talk a deal could be announced today.
DMG apparently bid pounds 150m for the NatWest operation. The bank has not, like Barclays, actually put its securities side up for sale. But, it is widely believed, it would be relieved to end its costly and unhappy attempt to create a leading securities operation. It is alleged to be asking pounds 300m; the gulf between the asking and bidding price could, it is thought, be resolved in a compromise deal.
HSBC, up 67p at 1,552p, and Standard Chartered, 21p to 668p, were beneficiaries of the Hong Kong display. Schroders continued to recover from last week's sell-off, gaining 90p to 1,800p, and Bank of Scotland, for no apparent reason, put on 18p to 510p. Hambros, the merchant bank where break-up rumours swirl, shaded to 250.5p. The UK Active Fund has popped up with a 3 per cent shareholding; Regent Pacific, another vulture fund, also has 3 per cent.
The stock market had an uneventful session with Footsie ending up 64.1 points at 4,906.4. At lunch time the gain was 102. Trading was again quiet with American influences largely dominating.
Although the banking fraternity led shares higher the beerage made a strong contribution.
Scottish & Newcastle, down to 619p last week, rallied a further 29.5p to 704p. Interim figures are due soon. Allied Domecq, 12.5p to 499p, hardened on its exit from brewing with Carlsberg of Denmark not forcing the retail and spirits group to take a 14.9 per cent stake in the Carlsberg-Tetley breweries and renewed speculation about its role now the Grand Metropolitan/Guinness merger is almost through.
Bass, buying a CT brewery and closing two of its own, put on 9p to 837p and GrandMet and Guinness rose following the 70p-a-share special merger payment.
Cadbury Schweppes fell 9p to 591p on, it appeared, some US selling. Last week the soft drinks to sweets group gave investment presentations and announced modest trans-Atlantic progress.
Reckitt & Colman, the household goods group, fell 27p to 887.5p on downgradings and Glaxo Wellcome failed to hold most of an early gain after problems with a US diabetic drug with which it has links were revealed. The shares ended 2p higher at 1,280p.
The upset at Liberty, the retailer, lifted the shares 25p to 377.5p with the for sale sign hoisted by the beleaguered board and WH Smith added 5.5p to 383.5p as it started its break-up with the pounds 28m disposal of its US music shops.
ViewInn, a supplier of Internet services to hotels, rallied 11.5p to 80p after revealing it had found a US partner and Haemocell, a healthcare struggler, added 0.5p to 3.25p as it continued its hunt for a helpful associate.
The revamp at Serif, a hard-pressed security printer, is under way.
The shares rose 1p to 4.5p after details of a capital reduction and a change of name to Security & General Media became known.
Comino, a software group, fell 20p following tip sheet comment. The shares ended off 15p at 130p after it said its figures would "at least" be in line with expectations.
Automotive Precision, however, reversed 10p to 17.5p after warning its results would disappoint.
On Ofex, Text 100, a specialist public relations group, rose 5p to 44.5p after reporting a 22 per cent profits advance to pounds 1.24m and a 20 per cent dividend increase to 1.2p.