It's been a while since City traders have had an excuse to crack open the tequila. But yesterday that all changed. Well, almost. Not because there's a reason to be cheerful about the markets – far from it, it was a particularly nervy day after Monday's falls, with a sudden sell-off after lunch requiring some fancy footwork by the Square Mile's practitioners. No, it was about Diageo, which was said to be close to knocking back a stake in Jose Cuervo, a $3bn (£1.9bn) business which, as any hellraiser will tell you, is the world's biggest tequila brand.
Talk last night was that Diageo has made a breakthrough in discussions with the Beckmanns, heirs to the Cuervo family which set up the business 1795.
If the speculation is true Diageo boss Paul Walsh, famed for his love of big game hunting, will have bagged himself a prize he's been stalking for the best part of a year. He knows Cuervo well – professionally at least – as Diageo is its main distributor outside Mexico.
Traders bolted down the news with a lick of salt and slice of lemon, marking Diageo's shares up 8p at 1553p. Brokers pointed out a big potential for profit growth at Cuervo under Diageo's experienced hand, particularly in the US.
To other news: What does the billionaire do when all the other rich kids are spreading nasty rumours about his profitability? Pick on someone else and pour doubt on their rich list position. That's what JPMorgan did yesterday, downgrading International Airlines Group, owner of British Airways, perhaps to get the City talking about the airline business instead of its own $2bn tale of Jamie and the whale.
The US bank slashed its rating of IAG from overweight to neutral, sending IAG's share price plunging to the bottom of the benchmark index. Already the airlines group, which also owns Spain's Iberia, was under pressure after warning on Friday that it will only break even this year. JP Morgan's downbeat assessment only added to its problems. "We see headwinds from weaker Spanish trading, coupled with higher than expected bmi losses, and an overhang from Banki [the bank that is very exposed to Spain's property crash and IAG's biggest shareholder]." IAG shares landed 9.5p or 6 per cent lower at 149.9p.
The deflection tactic didn't work: JPMorgan was still the talk of the City. "But only because there's nothing else happening," said one bored trader. "It's Groundhog Day. Again. Every day it's the same: Europe. You think Greece is sorted, then Spain and Portugal come to the fore. Then Greece is back, and they take a back seat. It's boring. The phones aren't ringing, people are too scared to do anything."
Little wonder there was no sign of a rally yesterday following the FTSE 100's 2012 low on Monday. The index fell 27.9 to 5437.62 by the close. "Shares are going cheap, surely bargain hunters will come out soon," said one trader, with more than a touch of desperation in his voice. The reason for his angst wasn't exactly concern for the global economy. "The only thing in my bonus pot is cobwebs," he complained.
The miners – who sway whichever way the latest economic indicator blows – lost early gains on the grim news from Europe and China. Kazakhmys fell 30p to 707p, Vedanta lost 40p to 1013p and Rio Tinto took an 89.5p bath at 2953.5p.
But it wasn't all bleak. Investors are still waking up to the typical overselling of the cruise line operator Carnival, whose shares fell so sharply after the sinking of its Concordia liner. Carnival was full steam ahead to the top of the Footsie leaderboard, gaining 67p to 2034p.
G4S was the biggest riser thanks to strong Olympic-fuelled revenue growth: shares picked up 8.4p to 275.2p.
Elsewhere, Renishaw was having a good day. The precision tool maker's trading update showing a steady three months' business and signs of an upturn in the electronics market prompted analysts at Numis to lift their rating on the stock from reduce to hold. Shares jumped 9 per cent, or 126p, to 1467p.
Among the tiddlers, philatelists usually focus on the Strand's stamps and coins dealer Stanley Gibbons, but it's not the only one doing well out of the flock to alternative investments. AIM-listed Noble Investments, which handles collectors' rare coins from Ancient Greek, Roman and Byzantine civilisations onwards, told the market of its 59 per cent leap in pre-tax profit thanks to stonking demand from India, China and the Middle East. Shares put on 3p to 197p.
But the Greek uncertainty was still leaving financial stocks wobbly. Banks have fallen have 9 per cent in the last three months, and continued that trend today. Barclays was off nearly 4p or 2 per cent at 186.1p, while Lloyds Banking Group was 0.5p cheaper at 28.9p.