Market Report: Holiday week investors sparked by ScottishPower bid

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The Independent Online
ScottishPower's pounds 1.56bn takeover splash lifted the stock market out of its traditional Whitsun week somnolence.

Waters, for so long overshadowed by electricities, made dramatic headway as bid fever retur ned to enliven the start of the sector's profit season.

Southern Water, the subject of ScottishPower's attentions, jumped a remarkable 260p to 941p in busy trading.

Anglian, due to launch the season today, rose 32p to 572p; Hyder 19p to 758p; Thames 17p to 564p; United Utilities 25p to 581p and the much ridiculed Yorkshire 53p to 690p.

South West Water, with bids from Severn Trent and Wessex before the Monopolies & Mergers Commission, firmed 14p to 663p, with Severn up 18.5p to 561p and Wessex 24p to 332p.

Electricities were mainly dull with Southern, which could be tempted to counter the Scottish strike, falling 26p to 726p. But the bubbling water sector did create flickers of excitement among some of the remaining electrical distributors with old takeover candidate Yorkshire Electricity 16p higher to 749p.

ScottishPower fell 17p to 319p and its "twin", Scottish Hydro Electricity, dipped 3p to 307p. National Power, helped by a buy recommendation from Salomon Brothers, edged ahead 2.5p to 519.5p.

British Gas, enjoying support from ABN Amro Hoare Govett, added 6p to 177.5p and BT, with a push from Morgan Stanley, the US securities house, gained 5.5p to 340p.

The utilities helped lift the FT-SE 100 index 8.1 points to 3,760.2 with the supporting FT-SE 250 index up 14.4 to 4,504.4. The indices failed to hold their best levels as the rest of the market drifted aimlessly with many investors, large and small, unwilling to disturb the lethargy which so often envelopes shares in the week after a bank holiday.

Thin turnover, recorded as 531.2 million shares, illustrated the low level of interest.

British Biotech offered a modest rally after its weakness following last week's positive presentation on its cancer drug. The shares gained 48p to 2,838p, drawing comfort from the issue of 40 million put and call warrants from Barclays de Zoete Wedd.

The utility action spilled over to banks and financials where many expect bid activity to erupt. Bank of Scotland and General Accident were the best performers. Prudential Corporation improved 3p to 427p.

National Westminster, already cash rich, is regarded as a likely predator. It is planning to add around pounds 470m to its reserves by selling its 17.7 per cent stake in the 3i investment group, off 15p to 452p.

Rolls-Royce managed a 5p gain to 229p despite a 16 page sell booklet from James Capel. Positive noises from Hoare Govett and NatWest Securities blunted the Capel attack and sentiment was helped by the suspicion a deal involving British Airways and Boeing is near.

Lucas Industries was again actively traded, awaiting merger developments. The shares fell 2p to 233p.

Dixons gained 4p to 499p following a meeting with Henderson Crosthwaite and Innovations, the direct sales group, rose 7p to 195p on continuing talk rival Betterware, unchanged at 92p, will upset plans for a management buy out, with a hostile strike.

Whitbread edged forward 3p to 720p as NatWest moved from hold to add. The once neglected pubcos had another strong session with Century Inns up 9p to 153p and Enterprise Inns 11p to 234p.

Tomkins, the buns to guns conglomerate, slipped 4p to 247p. The shares have fallen from 280p in recent weeks, with worries of a cautious trading statement on the BTR lines ruffling sentiment.

Unigate, reflecting the baby milk crisis, fell 5p to 405p.

Andrews Sykes, the air conditioning group, gained 40p to 380p following Independent on Sunday comment. Jarvis improved another 7p to 97p on further consideration of its rail maintenance deal.

Capital & Western Estates, up 0.75p to 3p, said it was in talks to buy Ballynatray Holdings, unchanged at 5.75p, and unquoted Global, an internet business.

Grand Metropolitan, the food and drink group, added 6p to 441p as rumours of corporate action, a bid or break-up, continued to swirl.

Haemocell, a maker of medical equipment, continued to cast a cautionary shadow over the bio babes who seemed to have settled down after their recent exciting run.

The shares, 219p in 1992, found a new low - just 16p. Earlier this month the company reported a lower six month loss - pounds 730,000 - and a cash raising exercise through a share placing at 17p.