Unlikely trio lead the pack as Footsie goes for a run

MARKET REPORT

It may be a coincidence - or then it may not - but an unlikely collection of stock market takeover candidates eased themselves to new highs.

On the surface Alliance & Leicester, the building society turned bank, Commercial Union, the old established insurance group, and Norwich Union, the insurer which arrived in June, have, apart from their fascination with money, little in common.

Yet in often brisk trading A&L rose 12.5p to 642.5p with the now-inevitable speculation that bid activity is imminent prompting much of the interest.

A&L is seen as obvious fodder for a clearing bank - Barclays? - or another ex-building society such as Halifax.

Its shares, when dealings started in April, ended their first session at 566.5p. Former members who sold on conversion got 533.7p a share.

And CU, for long the subject of the City's rumour mill, rose 9.5p to 757.5p. An array of bidders, ranging from the German Allianz to a domestic operation such as General Accident, have for long been linked with the group.

Norwich was regarded as a bid target even before it came to market in June. It is due to go into Footsie later this month, an event which keeps the shares on their toes.

The price rose 6p to 550.5p, a closing peak, with the nagging story that Halifax, known to be nursing ambitions about expanding into insurance, is preparing to go on the warpath.

The unlikely threesome were not the only financial shares, which have lost some of their exuberance lately, to hit the high spots. Royal Sun & Alliance, the insurer, jumped 29.5p to 537.5p and General Accident 42.5p to 969p.

The rest of the market enjoyed another captivating run with Footsie ending 82 points higher at 4,952.2. The gentle evaporation of Pacific fears and a robust New York display in early trading fuelled the gain. It was the biggest advance for two months.

As if underlining that Far Eastern markets were riding out the storm, HSBC, by far the worst casualty of the Tiger turmoil, recovered 96p to 2,006p. Standard Chartered put on 30p to 862.5p.

British Aerospace flew 50.5p higher to 1,510.5p. The aero group responded to an order for 65 aircraft, worth $4bn, won by its Airbus Industrie associate. BAe has a 20 per cent interest in Airbus and makes the wings for its aircraft.

It is likely that Airbus will, in the not-too-distant future, be rolled up and floated.

Such a move would enhance BAe's share of the consortium and there is speculation it would hand its interest directly to shareholders as a share bonus.

Body Shop International was the best-performing retail share with a combination of takeover and trading revival stories influencing the action; the shares rose 17p to 189.5p. They were bumping along at a 150p low last month.

The company, which has achieved little profits headway over the past four years, has high hopes of a home selling exercise, based on the Tupperware concept.

Thistle Hotels' disappointing profits display lowered the shares 19p to 132.5p and George Wimpey, the nation's biggest house-builder, lost 4p to 126p following interim results.

WH Smith, still seeking a chief executive, firmed 11p to 390.5p, best for two months. Hopes continue to circulate that during the present power vacuum a brave break-up bidder will appear. The market is divided about the merits of a break assault with many taking the view a sum-of-the-parts calculation does not support such a manoeuvre. Smith is not expected to produce a new chief executive, replacing Bill Cockburn who is joining BT, until next month.

Bluebird, the toys group, held at 92.5p. Guinness Peat, run by New Zealand entrepreneur Sir Ron Brierley, has picked up another 75,000 shares, lifting its stake to 9.18 per cent. Guinness Peat has established a reputation for building stakes in what it regards as undervalued companies. It has alighted on obscure groups such as Gowrings, the Burger King and garage chain, and Young & Co's Brewery. Bluebird's last set of figures showed interim profits down from pounds 3.1m to pounds 1.9m.

The shares were 200p early this year and hit 386p around Christmas last year.

First Leisure Corporation edged back into the takeover frame, gaining 5.5p to 309p. Bass, up 15p to 849p, remains the favourite to strike.

Cliveden, the hotel chain which has been the subject of takeover speculation, fell 3.5p to 60p, back to the low hit last month.