The sector also had to contend with a surprise pounds 70m convertible bond from Royal Insurance and talk that some income funds are becoming increasingly worried about the dividend payments of insurers.
The sudden bout of anxiety pushed Commercial Union down 12p to 595p, General Accident 10p to 578, Guardian Royal Exchange 3p to 174p, Royal 12p to 253p and Sun Alliance 5p to 331p.
Even before this week's inhospitable weather 1992 trading prospects were shrouded in gloom, with the five composites due to report losses. There is little chance of any dividend increase and Royal will more than halve its payment.
The rest of the market got back on the uproad, thanks largely to a big programme trade by Goldman Sachs, the US investment house. The buy-and- sell exercise, thought to be worth pounds 130m, was said to stem from a portfolio reshaping. Among the shares involved were General Electric Co, Lucas Industries, Medeva and Mirror Group Newspapers. With a number of smaller trades evident turnover reached 669.5 million.
The market was also helped by continuing suggestions that a big bid was about to be rolled out. British Aerospace was the latest candidate to be put forward. The shares enjoyed a late run, gaining 14p to 142p in keen trading. Stories that GEC, unchanged at 263p, could be tempted to absorb BAe have often surfaced; Hanson, down 0.5p at 236p following its year's results, is another possible contender for aero honours.
Fisons also caught the bid bug, with Astra of Sweden still in the frame.
But there were also suggestions that two disposals that would wipe out the group's debt were close. The shares gained 10p to 223p.
BTR, thought to be nursing bid intentions, ended 0.5p higher at 518p as an institution unloaded 7 million shares at 516p through Smith New Court. Lucas, regarded as a BTR bid candidate, rose 2p to 136p but Tarmac, another rumoured target, lost 2p to 94p.
GKN, following the UK arms deal with Kuwait, shaded 2p to 417p.
Spring Ram, the bathroom and kitchen group, was at one time down to 82p, following Wednesday's institutional sale of 7.7 million shares at 98p. The shares, 181p earlier this year, closed at 89p, down 11.5p.
The group, according to its company secretary, Paul Weaver, has yet to decide whether to make a statement about its share performance. Talks are going on with its financial advisers. Spring Ram, which has just completed the pounds 12.3m acquisition of Stag Furniture, rattled the market when it disclosed accounting irregularities at a subsidiary.
Alexon, the fashion group, slumped 27p to 98p after it warned that trading was poor and market estimates of about pounds 7.5m were over the top. Khaleeq Taimuri of Carr Kitcat & Aitken cut his forecast to pounds 4.5m and warned the final dividend could be lowered from 7.6p to 4p.
The shares, 382p earlier this year, have fallen from 200p since reduced interim profits were announced two months ago.
The Etam fashion chain rose 9p to 240p, reflecting the increased shareholding of Oceana Consolidated, a thwarted bidder.
Internationals were helped by a strong US dollar and American buying. Imperial Chemical Industries enjoyed the added bonus of anticipation of Monday's presentation by Zeneca, its drugs division expected to be demerged next year.
Courtaulds, up 5p at 544p, and British Vita, 11p at 236p, drew support from analysts' visits, and Boots improved 5p to 530p following an SG Warburg investment presentation.
Hong Kong-related shares, after early weakness, recovered on hopes the colony's share market, weak on growing tension with China, will rally today.
HSBC, the banking group, at one time down 24p, ended 5p higher at 485p. Cable and Wireless rose 7p to 650p.
Reuters, the information group, jumped 25p to 1,376p, a peak, on US buying and hopes of a share split.
Wickes, down 2p at 75p, placed 13.5 million shares at 72.5p through Warburg to finance its store opening programme.
Pepe, the hard-pressed jeans group, lost most of Wednesday's advance based on rumours, later denied, of a reverse takeover by Joe Bloggs. The shares fell 3.5p to 7.5p.
Shares failed to hold their best levels, with the FT-SE 100 index, at one time up 13.6 points, ending 6.9 higher at 2,771. The FT-SE 250 index rose 4.1 to 2,654.9. Trading volume reached 669.5 million shares, with 25,783 bargains logged. Government stocks rose by up to pounds 11 2 , encouraged by German demand
Shares of Owners Abroad, the holiday group, were keenly traded, climbing 1p to 72p. Two months ago it admitted that takeover talks were on, and there is growing speculation a deal will be announced next week. OA executives have held meetings in Germany this week. The German group LTU, owner of Thomas Cook, is the favourite to capture OA.
Upmarket furnishers and fabric distributors Colefax & Fowler suddenly came to life yesterday with the rarely traded shares, reflecting five sizeable deals, moving ahead 8p to 34p. They touched 70p earlier this year. Profits have been under pressure and a little-changed out- turn of pounds 700,000 is expected this year. Takeover action could be on the horizon.Reuse content