Although it failed to hold its best level the FT-SE 100 index gained 23.4 points to 3,693, encouraged by another record-breaking display in New York and the continuing flow of better-than-expected company results.
Since hitting 634.5p in June P&O, which still clings to the more luxurious title of Peninsular & Oriental Steam Navigation Co., has lagged behind the market, only stirring when stories of break-up bids went the rounds.
In September P&O produced little-changed interim profits and the year's figures are expected to come in at pounds 305m, down from pounds 341.4m.
There has been considerable disenchantment with its recent performance. In some quarters it is seen as a Forte - an obvious target for a break- up bid.
In the past year P&O has sold properties worth pounds 100m but a much more radical approach to disposals is thought to be necessary.
There is talk that Lord Sterling, the chairman, is near to clinching the sale of more property holdings and could even unload the Bovis building division.
The proceeds from such deals could be used to increase P&O's fleet by buying Cunard, up for sale following the Kvaerner takeover of Trafalgar House.
Unwanted lines of stock lowered SmithKline Beecham and Zeneca and analysts' meetings had an impact.
Welsh Water, up 4p to 738p, and Wickes, 3p firmer at 130p, met analysts; Northern Foods, also under the analytical gaze, shaded to 193p. Shares with US connections moved ahead. British Petroleum, helped along by a misjudged order, gushed 15p to 574.5p; Tomkins added 4p to 256p.
Guinness dipped 8p to 461p as Credit Lyonnais Laing turned negative ahead of tomorrow's results. BAT Industries, in heavy trading, shaded to 187p as worries of US litigation continued to overshadow the shares. But T&N, where there was talk of positive insurance developments on the asbestos- related front, gained 6p to 170p.
Frost, the petrol retailer being squeezed in the battle of the forecourts, fell 9p to 110p. Figures are due today; the shares were 269p last year.
Austin Reed, the clothing retailer, enjoyed speculative attention, up 9p to 217p. Burton, up 1.5p to 143.5p, remains the favourite to pounce.
Unitech, awaiting Siebe's pleasure, fell 10p to 678p; Eurodisc Electron, where a 42 per cent stake is up for grabs, rose 5p to 300p.
Primary Health arrived on AIM at 100p, moving to 103p. The company, which raised pounds 15.5m, buys surgeries and medical centres and leases them to GPs.
Eidos, up 72p to 810p, has landed a licensing deal with the US software giant Oracle to incorporate its video technology in a range of products.
Maid rose 4p to 196p. It has 15 per cent of Easynet, an internet service provider, due to arrive on AIM on Friday. Easynet's offer for sale was oversubscribed 5.6 times.
Results lifted Rexam, the packaging and paper group, 15p to 375p; SBC Warburg suggested that the shares should be sold down to 332p when the group would lose its Footsie membership. Albright & Wilson, the chemicals group, gained 14p to 185p on figures.
James Fisher, a ship-owner, jumped 25p to 130p on a 133 per cent profit advance and doubled dividend; Psion, the hand-held computer maker, gained 60p to 1,015p on a 77.9 per cent profit advance.
Kingsbury, a furniture retailer which came to market at 100p last summer, gained 34p to 223p. It has swung from a pounds 930,000 loss to pounds 3.2m profit. The dividend is up 50 per cent. The day's profit warning came from Dawson, the transport group, off 41p at 205p.
Farnell, the electronics group which, after a controversial shareholders' confrontation, won the go-ahead for the pounds 1.85bn takeover of a US group, was little changed at 620p. Unofficial trading is expected to start today in the convertible loan stock issued in connection with the deal. Barclays de Zoete Wedd and Salomon Brothers will market-make.
Instem, the information systems group, was little changed at 173p. It is likely to switch from the doomed unlisted securities market to AIM; a route expected to be adopted by other USM companies. Around 38 per cent of the company is owned by Dobson Park, the mining equipment group taken over by Harnischfeger, a US group, last summer.
r Marine & Mercantile, seeking oil and gas in central and eastern Europe, arrives on AIM tomorrow. It has raised pounds 6.75m selling shares at 135p. The company, which used to be traded on the disbanded 4.2 share market, is run by three former Ultramar executives.
r Symonds Engineering gained 2p to 61p on talk that it was on the verge of a big acquisition that could prompt a suspension of its shares. The group is being revamped by the Midlands businessman Ron Ackrill. It shares have come up from 29p in the past year.
r United Energy, the oil and gas group, is thought to be near to agreeing a settlement of its $11m US legal claim. Figures for the company, due next month, should show that the group's revival is gathering pace. The shares held at 13p.
FT-SE 100 3,693.0 +23.4
FT-SE 250 4,274.2 +29.7
FT-SE 350 1,856.2 +12.0
SEAQ VOLUME 884.2m shares, 41,645 bargains
Gilts Index 92.09 -0.13