Market Report: Reuters hits headlines on Internet rumours

REUTERS MADE the market headlines yesterday amid rumours of a major Internet tie-up. In a drab day for the market, the web talk left the information giant 11.5p higher to 870p with over 2 million shares traded.

Some switched-on dealers piled into the stock as they decided that the talk of Reuters' online deal was much more interesting than any story to be found on its news screens.

The whispers centred on Reuters' plans for a financial services website. According to well-informed traders, the media group is in talks to provide a major Internet operator with kit to set up an online financial services "one stop shop", with services ranging from share dealing to insurance. The speculation was given weight by talk that Reuters' upper echelons were in meetings with bankers to thrash out a deal.

Plenty of names of potential partners were mentioned, but the US giants Yahoo! and American Online were top of the list. Fans of AOL noted that the group has recently announced the launch of a free Net service in the UK and argued that a Reuters-sponsored financial services supermarket would be the ideal way to gain subscribers.

However, rival Yahoo! has also been known to be looking for partners to beef up its financial offering, and Reuters would not be a bad choice. Any tie-up would be a blow to Freeserve - which recovered from an early fall to close 2p higher to 195p - and its owner Dixons, down 35p to 1,136p.

The UK company certainly has what it takes to feed a financialservice.com site. Apart from its bulging news feeds, Reuters owns the on-line brokerage Instinet, which could easily be adapted to cater for retail investors.

Some takeover-hungry dealers dismissed the Internet talk and rehashed old rumours that Reuters could merge with Rupert Murdoch's News Corp - a far-fetched but not impossible deal.

Traders who did not want to punt on the jam-tomorrow promises of an Internet contract logged on to old-fashioned metal bashers. Defence engineer Vickers rocketed 10.5p higher to 172.5p on talk of corporate action. One of the rumours said that Vickers could be having a look at fellow tank-maker Alvis, up 11.5p to 159p, or even electronic group Fairey, 13p higher to 424p.

However, other whisperers talked of Vickers as prey rather than predator, reawakening talk of a bid from French competitor GIAT, cash-rich US fund Carlyle or the acquisitive domestic rival TI, 10.25p better at 512.75p.

Fellow engineer Bodycote also rose 9p to 401p on vague takeover talk. Blue-chip rival Invensys rose 5p to 340.75p after two small purchases and talk of big disposals.

When engineers are the most interesting thing in the market, you know it is a dull day. The FTSE 100 closed 5.4 points better at 6,126.4 after moving in a tight range for most of the session. A strong set of input producer price data triggered minor fears of a rate hike, but all was forgotten when Wall Street opened higher.

The midcap was even more depressed, ending an uneventful session 2 points lower at 5,969.1, while the Small Cap edged 2.5 higher to 2,730.2.

The developer Land Securities was hot property. The shares climbed 23.5p to 863p on talk of an upgrade from a major broker. Some dealers talked of a sector review as rivals British Land, 9.5p better to 526.5p, and Hammerson, 5p higher to 482.5p, were also in demand.

Braver minds said that Land Securities could be looking at a leaseback agreement with a major corporate partner.

Retailers were active. Boots bagged a 27.5p rise to 780.5p as investors noted their low rating compared to some peers. Vague talk of a merger with Kingfisher, down 13p to 682p, was also heard. Safeway, a perennial target for Kingfisher or Somerfield, firmed 4.5p to 235p.

Other supermarkets were hit by news of a price war by Asda, down 0.5p to 219.5p. Tesco, 3.25p lower to 167.25p, and Sainsbury, down 2.5p to 393.25p, were two casualties. Minnow Alldays plunged 10p to 69.5p after admitting financial problems.

Most recipients of British Energy's new A shares - part of its pounds 432m return of capital to shareholders - sold them back to the company, sending them 2.5p lower to 57.5p. The normal stock ended 5.5p down to 507p.

Shell flared 14p to 537p after a Merrill Lynch push, while AstraZeneca shot 35p better to 2,269p on revived whispers of a sale of its agrochemicals business to Novartis of Switzerland.

Among the fallers, Orange was squeezed 27.5p lower to 917.5p by Richard Branson's Our Price decision to sell mobile phones. Leisure group Granada finished 14.5p down to 603.5p amid vague talk of a tough second half and dislike at its reported purchase of a 9.9 per cent stake in Leeds Football Club owner Leeds Sporting, up 1.75p to 21.75p.

Building materials midcapper RMC crumbled 50p to 1,062p on fears that a fine by the German competition watchdog could wipe 10 per cent off profits. Rival Hepworth surged 8p to 220.5p amid vague bid talk. Builders' merchant minnow Graham built a 41.5p advance on an agreed 192.4p-a-share bid from Meyer, up 1.5p to 461.5p. Travis Perkins, 2p higher to 786p could gatecrash the deal or go for rivals Sharpe Fisher, up 23p to 242.5p, or SIG, 2p higher to 244p.

Bid talk and support from Investec pushed Rank 10.25p higher to 285p, while United Biscuits warmed 5.25p to 185p after putting its frozen foods unit up for sale. Conglomerate Tomkins rose 8.75p to 280.5p on reports of a mega management buyout.

Returning bid talk lifted British Biotech 2.25p higher to 22.5p, while whispers of a big upgrade by a broker helped oil explorer Soco to a 6.5p rise to 68p. Textile group Lamont unravelled 11p to 17.5p after forecasting lower profits, while IT recruiter MSB International plunged 11p to 146.5p on profit warning fears.

SEAQ VOLUME: 1.3bn

SEAQ TRADES: 64,082

GILTS INDEX: 105.91 +0.21

MICHAEL ASHCROFT's recent tribulations have not diminished his appetite for deals. According to rumours, Mr Ashcroft has been taking a look at AIM-listed Mears. The group, which yesterday firmed 1.5p to 13.25p after a small acquisition, specialises in building maintenance and would be a perfect buy for Mr Ashcroft's Carlisle Holdings. Any talks would be made easier by Mears' chairman Martin O'Halloran, a former associate of Mr Ashcroft.

THE CHEMICAL minnow Biofocus could be close to winning an important outsourcing deal with a major drug company. The shares, traded in the lightly regulated Ofex market, climbed 3p to 90.5p yesterday amid hopes of an announcement in the near-term. Some dealers believe that Biofocus, which carries out chemical work on behalf of pharmaceutical group, could be in talks with one of the sector's big hitters such as Roche.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
Frank Turner performing at 93 Feet East
musicReview: 93 Feet East, London
News
Toronto tops the charts across a range of indexes
news

World cities ranked in terms of safety, food security and 'liveability'

Extras
indybest
Voices
A mother and her child
voices
Voices
The veterans Mark Hayward, Hugh Thompson and Sean Staines (back) with Grayson Perry (front left) and Evgeny Lebedev
charity appealMaverick artist Grayson Perry backs our campaign
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee