Takeover talk and rate hopes produce another record

MARKET REPORT

Another day, another record. Inspired by takeover and lower interest rate hopes leading shares ended a remarkable week in ebullient form with the FT-SE 100 index up 16.1 points at 3,680.4. Except for a modest relapse on Budget day the index has made steady progress this week, gaining 56.4 points.

But the stock market is not quite such a happy place as the rip roaring index performance might suggest. Said one stockbroker: "98 per cent of this market is doing absolutely nothing; the other 2 per cent is going ballistic".

Certainly blue chips need interest rate cuts and at least one big takeover bid for support. The rates reduction should occur soon and, if the rumour mill was in form, the bid action should come early next week. GRE, the Guardian Royal Exchange insurance group, reasserted its position as the market's favourite victim.

The shares outperformed other blue chips, achieving a 22p gain to 292p in unusually busy trading. BAT Industries, facing increasing tobacco problems in the US, is regarded as the most likely to strike. The insurance group is seen as an ideal add-on to BAT's already extensive financial interests which include the Eagle Star insurance business. BAT shares were unchanged at 557.5p.

But a BAT strike is not the only story circulating. A defensive merger with Legal & General, also a rumoured target, is another continuing yarn; so is a get-together with the market's leading bank bid candidate, Standard Chartered. Suggestions the long rumoured Continental insurance bid is at last about to materialise lifted some other insurers, with Royal up 17p at 400p and General Accident 18p at 683p.

L&G was little changed at 694p; Standard, in a strong bank sector, rose a further 8p to 614p.

Other takeover favourites bounced higher, including Bank of Scotland, Royal Bank of Scotland and Asda, the supermarket chain.

Vickers, the engineering group embracing Rolls-Royce cars, was another in the bid frame with talk of a Continental strike creating the action. The shares purred 7p to 278p.

The biotech babes were again high on drugs. British Biotech, on its cancer drug, was traded at 2,625p overnight and touched 2,150p in morning trading on hopes of US buying. But the Americans failed to arrive and the shares closed at 1,675p, up 127p. There are expectations the group will produce encouraging progress reports on another drug over the weekend.

Proteus, the drug designer, rose 35p to 144p, as it announced the first of its signalled deals, an income-producing licence agreement with SmithKline Beecham. Celltech, results on Wednesday, gained 53p to 602p and newcomer Peptide Therapeutics put on a further 13p to 251p.

MAID, the on-line information group which has just achieved a US listing, headed the hi-tech brigade, spurting 39p to 274p as it put its 100 million pages of business information on to the Internet.

CMG, a computer software group, made a bright start; placed at 290p, the shares reached 339p.

But it was not all one way traffic. BSkyB was at one time up 27p as buyers chased shares in a narrow market. They banked on US buying following the company's inclusion in the internationally followed Morgan Stanley Capital Index and further support from the Endsleigh League deal.

But then the Office of Fair Trading intervened, deciding to review the satellite television group's sports coverage, presumably sparked off by the Endsleigh deal, and its relationship with cable channels.

In often frantic trading the shares slumped 51p and then staged a modest rally, closing 5.5p down at 428.5p.

Coal Investments was another casualty, crashing 21p to 35p. The shares were 119p earlier this year. CI has had to fix up new loan terms with its bankers and is preparing a rights issue, said to be at around 10p.

De La Rue, the paper and security printing group, tumbled a further 17p to 643p. The shares have crashed from a high of 1,052p this year. The group issued another profit warning this week and analysts are continuing to make negative noises.

Hanson is another to lose its appeal. Its latest results prompted a round of downgradings, lowering the shares 10.5p to 185p, lowest for three years.

Pearson jumped 33p to 682p with a brace of big buyers appearing towards the close, and Grand Metropolitan slipped 3p to 439p. Its ESOP sold 51.9 million shares to SBC Warburg which, with Cazenove, placed 15.8 million at around 431p.

Start your day with The Independent, sign up for daily news emails
News
Bill Gates, founder of Microsoft and co-chair of the Bill and Melinda Gates Foundation
businessUber, Snapchat and Facebook founders among those on the 2015 Forbes Billionaire List
News
news... and what your reaction to the creatures above says about you
News
Homer’s equation, in an episode in 1998, comes close to the truth, as revealed 14 years later
science
News
news
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003