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Market Report: Speculation surrounds building societies as Footsie jumps 90 points

Footsie, assuming the calculation is relevant after Friday's fiasco, jumped 90 points with much of the excitement, not for the first time, swirling around financial shares.

Former building societies were again at the heart of the speculation with Abbey National jumping 34p to 979p on what appeared to be scattered late buying.

National Westminster Bank, expected to bow out of investment banking today, eased 13p to 885p and Hambros, rumoured to be in the sights of Societe Generale, was little changed at 251p.

The NatWest retreat should see its equity arm go to US group Bankers Trust and Deutsche Bank take on the derivatives operations.

Hambros, which has still to recover from its humiliating involvement with Andrew Regan's Lanica Trust, is under pressure to reshape, with at least one hostile shareholder on its register. Robert Fleming and Schroders have, according to rumour, been examining the merchant bank, striving to come up with a new, more exciting strategy.

The acquisitive US bank Donaldson Lufkin & Jenrette and the German Westdeutsche Landesbank are among those to look at the old established operation. An Italian bank, Gruppo Bancario San Paolo, with 16.6 per cent, is another in the frame.

But SocGen appears to have emerged as the favourite to strike. If it does, one of its first functions could be to sell on the quoted Hambro Countrywide estate agency chain, where Hambros has a controlling interest.

The estate agent could, in the short term, satisfy the ambitions of cash- rich Halifax, up 15.5p to 695.5p. Little changed at 110.5p, Countrywide is valued at a little under pounds 400m, not much more than out-of-pocket expenses for the building society-cum-bank.

Woolwich, 8.5p higher at 311p, and Alliance & Leicester, 10p at 740p, were others in the money.

Insurances were strong with the hoary old story that they were merely reflecting the stock market's strength offered as one explanation. Almost certainly General Accident's 62p advance to 1,025p and GRE's 16.25p progress to 301.5p were due to more sophisticated expectations.

Other financials in the spotlight included Standard Chartered and Bank of Scotland.

Turnover was again unexciting and did not provide the sort of back-up expected for a 90 points Footsie gain. The index ended at 4,921.8 and, as if trying to underline the volatility of the order-driven trading system, the supporting FTSE 250 index had a much more sedate time, ending with just a 0.9 gain to 4,657.6.

On Friday late trades in Glaxo Wellcome and SmithKline Beecham sent the respective shares tumbling, encouraging Footsie to fall 57.2. The Stock Exchange said it was probing the latest index distortion and after the market closed, the US investment group JP Morgan said it had suspended two traders during an investigation into Friday's trading.

SB, down 50p on Friday, rallied 48p to 598p and, despite the suspension of a diabetes drug, Glaxo regained 40p of a 78p Friday reverse.

Zeneca, up 60p to 1,950p, responded to a positive investment presentation when the group highlighted its development programme, which covers 87 projects including 26 new compounds.

Talk of corporate developments at Stakis, the casino and hotel group, was responsible for a 3.5p gain to 103p and Manchester Utd, in its new slimline form, scored a 4p plus to 156p following its conquest of Blackburn Rovers.

Bass, figures tomorrow, frothed up 14p to 864p, on reports it is planning to sell its betting shops and bingo operations.

Suggestions, once again, that Whitbread is set to leave the beerage prompted an 18p rise to 855p. There are also reports that Whitbread and Allied Domecq, up 2.5p to 536.5p, are seeking to withdraw from the off-licence trade. Scottish & Newcastle, following results, gained 19.5p to 714.5p.

Firth, the steel group, reporting today, gained 3p to 35p, a two-day 7p advance. UDO, an office equipment business, jumped 22.5p to 182.5p on a signalled bid of up to 210p.