Market Report: Hanson refuels takeover talk with dollars 1bn injection

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The FT-SE 100 index closed 16.6 points down at 3,333.7 and the FT-SE 250 index was 15 lower at 3,968.9. Turnover was 625.2 million shares with 29,617 deals. The account ends on Friday with settlement on 7 March.

A SURPRISE dollars 1bn Hanson cash- raising exercise created a surge of excitement, prompting stories of another big takeover bid to resurface and pushing the shares of the sprawling conglomerate 6.5p lower to 275p.

The group's US offshoot is offering notes that can be converted into Hanson ADRs.

The move follows closely on the announcements that it plans to float the Beazer building business and a third of its Beazer operation in the US.

Many suspect that Hanson is clearing the decks for a substantial acquisition. But the Hanson camp was, not surprisingly, keen to stress that the group was merely repaying bank debts.

Even so, Hanson's gearing after the loan note issue and the Beazer sales will have fallen sharply, leaving it well placed for any predatory move such as the rumoured US tobacco buy.

The rest of the stock market suffered another retreat - its third in succession - although there are hopes of a recovery today.

For much of the session the market fretted about what Alan Greenspan, the chairman of the Federal Reserve, might say when he appeared before a Congress banking committee. In the event, he was less bearish over interest rates than many had expected, testifying that the US economic outlook was the 'best we have seen in decades'.

Besides the Greenspan testimony, the behaviour of world bond markets kept shares on edge. Although there are signs that selling pressure has eased, the atmosphere remains extremely fragile and the reception to US bond auctions and today's gilt auction is anxiously awaited. Gilts had a volatile session, with falls of about pounds 1 4 .

The futures-driven FT-SE 100 index was at one time down 30 points. It closed 16.6 lower at 3,333.7 - the first close below the so-called 3,350-support point for two months. In three days the index has fallen 91.6 points.

Trading, although above Monday's depressed level, remained, by recent standards, subdued.

Insurances were weak following the Guardian Royal Exchange warning of increased competition. GRE fell 16p to 218p; Commercial Union 9p to 624p; General Accident 30p to 647p and Sun Alliance 13p to 361p.

Royal Insurance, with a 2 million line overhanging for much of the session, ended 8p lower at 298p.

Electricities were lower. Eastern Electricity, which picked up 2 million of its shares at 663p, managed to edge ahead 1p to 663p.

Unilever's results left the shares 37p lower at 1,162 but Thorn EMI improved 10p to 1,148p on its figures.

British Aerospace, with overseas investors up to 27.57 per cent, was 9p higher at 540p ahead of today's results. But Imperial Chemical Industries continued to weaken on worries about tomorrow's figures. The shares fell 12p to 748p with more sell advice emerging.

Drinks staged a modest recovery. Merrydown held at 159p despite a rumour that Pernod Ricard, the French group, was eyeing the group following its profit warning and consequent fall from grace.

Granada fell 16p to 570p as the conviction continued to strengthen that it is near to winning the fierce battle for control of LWT (Holdings), down 15p to 728p. The bid closes on Friday.

Euro Disney fell 12p to 398p as worries about the French theme park remained. KPMG, the accountancy firm, has completed a report on the project for the centre's 63 bank lenders.

Great Universal Stores was hit by profit-taking after the recent sharp advance on hopes that it is planning to distribute some of its assets to shareholders. The shares retreated 17p to 615p.

Seet, once Scottish, English and European Textiles, is attracting attention. The shares gained 7p to 70p, a two-day rise of 14p. The loss-making group has paid no dividend for nearly four years.

Losses were reduced at the half- way stage and there are hopes of a return to profits. But the latest flurry indicates that a takeover strike could be in the wings.

Stanhope improved a further 3p to 45p following the arrival of British Land and its partner George Soros. BL rose 2p to 430p.

The insurance broker Bradstock fell 5p to 144p. Robert Gibson, a director, sold 160,000 shares at 147.5p, reducing his stake to 5.93 per cent.

Mosaic Investments, the merchandising and plastic group, rose 6p to 27p on the return of the former chief David Williams, who is thought to have a stake of about 8 per cent.

Aminex, the Irish oil group, gave up 5p to 65p. It has already moved into Russia, establishing a joint venture in the Komi Republic at a cost of more than pounds 3m. Russian interests have a near- 38 per cent stake.

It is thought that the Aminex team will be visiting Russia in the next few weeks and hopes are running high that a much bigger oil deal is in the pipeline.

Carr's Milling Industries, a flour miller, baker and animal feeds producer in Carlisle, rose 8p to 197p, a two-day gain of 12p. The activity stems from the sale by Northern Foods of its 4.75 per cent stake. Northern, which once nursed takeover ambitions, has timed its sale carefully. In the past year Carr's shares, on the back of recovery profits, have risen from 78p.

The newcomer Emerald Energy, which nearly doubled reserves to 6.1p a share in its last deal, could have another US acquisition in the pipeline. Directors are due to fly to the US today to examine a proposition which, it is felt, could again enhance reserves. The Emerald team is likely to be in the US for a month. The shares are 2.75p; they were placed at 1p in November.