Takeover speculation helps FTSE move forward

Bid talk surrounding fund-management firms and a strong performance from Vodafone helped the FTSE 100 Index move further from the 6,000 barrier today.

Heavyweight stocks Vodafone and HSBC were ahead by almost 3% and 2% respectively, boosting the Footsie, which extended its positive start to the week to close 41.8 points up at 6072.7.

The speculation in the fund-management sector involved talk that Goldman Sachs was preparing a bid for Amvescap. Shares in the potential target were up 32p to 629p, while Man Group lifted 36.25p to 478p, sending it to the top of the blue-chip risers board, and Icap gained 14.5p to 531.25p.

The much-needed improvement by Vodafone saw its share price cheer by 3.25p to 129.25p.

Among other market-moving stocks, GlaxoSmithKline added 3p to 1457p and global banking giant HSBC lifted 15.5p to 1010p.

On the downside, steel giant Corus lost some of its strength following several days of speculation over the prospect of a bid from India’s Tata. Shares slid 15p to 479p, a fall of more than 3%.

ITV was also under pressure, down half a penny at 99.75p, as speculation grew about the broadcaster’s battle to find a replacement for chief executive Charles Allen.

Marks & Spencer edged lower after stockbroker Seymour Pierce introduced a hold rating because the recovering retailer’s share price was at its target price of 664p. Shares fell 2p to 664.5p.

Richard Ratner, research analyst at Seymour Pierce, said: “We feel at current levels it is time to take a breather and pull our recommendation back.”

Elsewhere in the retail sector, Sainsbury’s fell 0.75p to 391p as traders prepared for the release of a second-quarter trading update tomorrow.

Outside the top flight, takeover talk caused shares in tour operator First Choice to rise by almost 6%, up 11.25p to 216.75p. Rival operator Kuoni was mentioned in the City as a potential bidder.

Meanwhile, rival MyTravel saw its shares rise 9.75p to 189.25p

At the top of the second-flight risers was Northumbrian Water, up 23.75p to 315.25p, a gain of 8%, also on bid speculation.

Biscuit maker Northern Foods was among the list of second-tier fallers, as investors digested another lacklustre trading update from the company.

The Leeds-based owner of Goodfella’s Pizzas and Fox’s Biscuits saw sales decline 1.1% in the six months to September 30. Shares fell 1.75p to 87.5p, a drop of nearly 2%.

Cake maker Inter Link Foods also slipped, down more than 13% or 66.5p to 432.5p, after it said it was no longer in takeover talks with a private-equity house.

The day’s biggest blue-chip risers were Man Group up 36.25p to 478p, Amvescap up 32p to 629p, Wolseley up 45p to 1211p and Icap up 14.5p to 531.25p.

The day’s biggest blue-chip fallers were Shire down 47p to 961p, Corus down 15p to 479p, Cadbury Schweppes off 9.5p to 551.5p and Carnival down 42p to 2556p.