Nearly 60 per cent of the day's trading of 710 million shares involved companies outside the top 100. The FT-SE 100 index bounced between minus and plus nine points, eventually closing at 3,160.4, a rise of 2.9.
Dealers were kept busy by corporate announcements and plenty of speculation about takeover bids and rights issues.
The recent strength of Enterprise Oil shares rekindled thoughts in some quarters about Elf Aquitaine selling its 10 per cent stake in the company.
Elf bought the shares for 450p each five years ago from Lasmo, the company that Enterprise recently failed to take over with a pounds 1.6bn bid.
The French company is said to be keen to raise money to cut debts. The stake is worth more than pounds 210m at Enterprise's current price of 426p, up from 380p a month ago.
Elf was understood earlier this year to be finalising a disposal but had to shelve its plans as Enterprise launched its takeover move for Lasmo.
The Enterprise holding was re-classified as 'non-core' by Elf following management changes earlier this year. Elf is struggling to rationalise its activities and is burdened by a mountain of debt.
It would need permission from Enterprise to sell the stake to a single buyer, leaving a placing of the shares with institutions as the most likely disposal option.
Lasmo rose 5p to 161p in early dealings amid some rumours of a further bid for the company. Total of France was widely tipped as a rival suitor during the Enterprise bid. Yesterday's rumours, however, were short-lived and Lasmo closed unchanged at 156p.
Meanwhile, SG Warburg and Swiss Bank Corporation settled their dispute over the cash sale of Lasmo shares. The announcement was made after hours. Warburg closed 9p lower at 760p.
The dispute, settled by a big donation to charity, has forced the Stock Exchange to review its rules governing agency crosses.
Commercial Union opened 7p lower as rumours of a big rights issue intensified. Talk was of a one-for-five, pounds 500m rights at 475p a share to help fund the likely pounds 1.5bn cost of buying the insurance operations of Groupe Victoire in France.
The share price fall sparked CU's investment relations machinery into action. Reports of an imminent rights were 'purely speculative', it said.
CU is due to report interim results next week. Dealers expect the results to be accompanied by a cash call. Shares responded to CU's action and finished the day at 550p, up 11p.
Events of a more tangible nature saw Tesco secure the Low road into Scotland.
A bid of 360p a share for William Low proved too much for Sainsbury, which last week trumped Tesco's previous offer with a bid of 305p.
Sainsbury's withdrawal, however, was not made until 9am, by which time the price of Low had gone out to 373p amid speculation of the auction continuing all the way to 400p.
Low closed at 359p, up 23p, Sainsbury held at 419p and Tesco eased 5.5p to 237.5p.
Other takeover action saw Great Southern spurt 28p to 708p on news of a possible rival bidder to SCI, which has raised the bid stakes to 680p.
Jefferson Smurfit shot up 22p to a all-time high of 396p in reaction to the previous day's after-hours announcement of the pounds 680m purchase of La Cellulose du Pin, the paper and paper packaging operations of Saint-Gobain in France.
Analysts were entusiastic about the deal. Tim Rothwell, at BZW, said: 'It is quite clear that the paper cycle has bottomed and that there is very strong potential for a turnaround.'
Average prices of paper materials have risen 35 per cent already this year, and a further increase is expected in September.
Drug shares were lifted in the wake of the aggressive dollars 8.5bn (pounds 5.5bn) bid by American Home Products for American Cyanamid. SmithKline Beecham, believed to be in asset-swap talks with Cyanamid, held at 422p as dealers played down fears that it would enter a bidding war.
Wellcome, often mentioned as a possible bid target, advanced 17p to 676p. Zeneca, expected to report interim profits of pounds 420m to pounds 440m, added 13p to 771p.
PowerGen added 25.5p to 545.5p as it repurchased for cancellation 2.5 million of its own shares at 527p each.
The FT-SE 100 share index managed only a 2.9-point advance to 3,160.4 following the previous day's 60-point surge. Second-line stocks, however, were in demand and the FT-SE Mid gained 16.2 to 3,689.6. Gilt-edged stocks lost around pounds 1 4 .
Long-suffering shareholders in Kembrey, the electricals group, are being put out of their misery through a pounds 4.8m bid from Chemring. Kembrey's directors have pledged their 27 per cent stake to the bid, which values the shares at 17.8p. Chemring, a radar-chaff to flares group, is raising pounds 5.4m via a placing of 1.97 million shares at 272p. Chemring held at 299p. Kembrey rose 4p to 16p.
The trickle of new issues continues. AromaScan, developer of sensor technology for aroma measurement and management, is joining the USM. About 12 million shares are being placed at 100p each, valuing the company at pounds 27m. Joint ventures with several international companies to exploit the technology, which emulates the human nose, commercially are expected soon.Reuse content