After the excitement surrounding News Corporation's approach for BSkyB the previous day, a hush settled on the London markets. Most traders were at Royal Ascot or watching the World Cup or wishing they were doing one of the two, prompting a gentle drift higher on the FTSE 100, which closed 20.1 points higher at 5,237.9,
Some tenuous bid speculation had the rumour mill turning late in the session, as gossips said Northumbrian Water was in the crosshairs. Traders were sceptical about the talk of a 385p per share bid. One senior spread better said the stock had enjoyed a strong day "but the trading patterns weren't exceptional".
Several peers on the top tier fell yesterday after they went ex-dividend. United Utilities Group was down as it also announced that Charlie Cornish, one of its managing directors, was to leave after six years on the board. The former head of the Utility Solutions division is moving on to take over as chief executive of Manchester airport. The shares gave up 21p to close at 538.5p. Severn Trent, also trading ex-divi ended the day as the lowest on the index, spiralled down 54p, or 4.14per cent, to close at 1249p.
Plunging for a second day was satellite group Inmarsat. The company had been hit by a Bank of America Merrill Lynch note the day before, cutting its rating from "underperform" to "neutral". It was followed up yesterday by analysts at JP Morgan. The US broker said the group could be preparing a significant investment into new satellites which "could depress medium term cash flow by as much as 50 per cent ahead of any increased revenue generation". The short-term risk to the price dragged the stock down and it ended the session 29.5p lower at 750p.
Top of the blue chips was Shire after Deutsche Bank initiated coverage on a positive note. Analyst Mark Clark said the group could look forward to "a period of strong revenue and earnings growth, based on a rebound in its ADHD franchise". The broker put a 1650p target price on the stock with a "buy" recommendation and the shares rose 35p to 1462p.
Another rise sparked by a broker upgrade was Aggreko. The temporary power group was described as a "unique asset" by David Phillips of Citi. He has just returned from a trip to Africa which "highlighted the sheer magnitude of opportunity which Aggreko has over the short, medium and long run in temporary power". He put a 1733p target on the stock with a "buy" rating.
There was talk of big upgrades set to go through at Royal Bank of Scotland, and it was bolstered yesterday by several small disposals as it looks to strip out non-core assets. In the morning it announced the $50.3m sell off of its Pakistan operations to Faysal. At the close it revealed it had also sold its UAE retail banking business to Abu Dhabi Commercial Bank. The shares closed up 0.95p at 45.17p.
Filtrona stormed to the top of the second line after it said trading in the first half had been materially ahead of expectations. The group, the world's leading independent cigarette filter manufacturer among other things, gained 13.4 per cent with its 26.4p rise to 222.5p on the update.
Shares in asset manager Gartmore Group were also strong, rising 4.2p to 116p, following the positive read across as rival Jupiter got its initial public offering away. While it priced near the bottom of the range, the market was happy it got away at all.
In the wider market, Mouchel Group's shares fell after it emerged that finance director Kevin Young was to leave the company. While its trading update was in line, Panmure Gordon said the departure would create uncertainty in the price, while trading "remains tough."
On the growth market, Intelek soared after it announced Teledyne Technologies had made a recommended offer valuing the group at £28m. Bosses at Intelek, which designs and manufactures electronic systems for satellite and microwave communication, were delighted with the price from the US group which is worth $1.4bn. The shares doubled from the previous night's close of 15.5p to just below the offer price of 31.25p.
Also on Aim, penny stock Serabi Mining also nearly saw its share price double after raising £3.6m by issuing shares to Eldorado Gold Corporation at a premium to the market price. It will use the proceeds to extend its current exploration programmes at Palito. The stock rose 1.1p to 2.4p following the announcement in the morning. Eldorado, a Canadian-based gold producer with interests in Turkey, China, Brazil and Greece, will hold 26.8 per cent of the company's total shares when the deal completes. Serabi chief executive Mike Hodgson said the subscription of an investor with "the stature of Eldorado is an endorsement of what we are seeking to achieve".
The proverbial hit the fan yesterday at Plant Health Care. The group, which makes biological fertiliser, warned on profits sending the shares down 64p to 111.5p. The profit forecasts were slashed after the group was forced to cut expectations over sales of its flagship Harpin product. Despite management saying further licensing talks were underway, the shares closed at levels not seen in almost four years.