Market report: Yesterday's trading

 

The rumour mill was working hard in London, putting Hanson at the top of the risers board (up 16½p at 727½p) on fresh speculation it could be a target for Mexico's Cemex.

Hanson, as the last major British-owned company in the aggregates sector, has repeatedly been touted as a likely takeover candidate for overseas predators.

The rumours returned in force yesterday after Australian building giant Rinker knocked back a £6.3bn bid from Cemex, with punters wagering the Mexican cement group might churn out a bid for Hanson instead.

It wouldn't be Cemex's first visit to the UK - it bought fellow cement maker RMC in 2005.

Takeover hopes would be dashed should it try to woo Rinker with a higher offer, although the Hanson bid speculation is likely to persist with other would-be bidders reportedly waiting in the wings.

Buyers poured into Kelda (up 13½ at 875½ amid hopes it might be the next water stock to receive takeover interest. Dealers said despite the high prices being paid for water companies, Kelda, the owner of Yorkshire water, was still attractive.

The bid speculation spilled over into United Utilities up 4p to 715p and Pennon Group up 3p at 527¼p.

But AWG, owner of Anglian Water, slipped 1p to 1596p as hopes faded that another bidder might wade in and trump the £2.25bn agreed deal from Osprey, the consortium consisting of Australian and Canadian banks and venture capitalist 3i. But the shares remain above the 1578p offer from Osprey.

Takeover speculation also lifted Standard Life, up 4½p at 287½p. French giant Axa is rumoured to be casting its eye over the Edinburgh-based life assurer after its interest in Scottish Widows was knocked back. Standard Life will be without a finance boss from today when Alison Reed leaves.

Talk is that former Scottish Power (down 5p at 656½p) beancounter David Nish is the favourite to replace her. The bid hopes gave a lift to Prudential, up 10½p at 641p, as well as Friends Provident, 2p firmer at 194p.

Costa Coffee owner Whitbread had a bad day, down 35p to 1388p. American broker Bear Stearns was said to be offloading a large chunk of shares on behalf of a mystery seller. Dealers said 7m had been dumped on to the market.

Major shareholders include Axa Investment Managers, Legal & General and Barclays Global Investors. Whoever was selling likely made a tidy profit, with shares in the operator of budget hotel chain Premier Travel Inn up over 70% in the last year.

The wider market had a hangover from last Friday's disappointing US data on economic growth and the FTSE 100 shed 34.1 points to 6126.8. The Dow drifted up 3.2 points to 12093.5, before slipping back to 12086.50.

Back in London, mining stocks bore the brunt of the gloom - Rio Tinto was down 39p to 2858p, BHP Billiton off 21p at 1,000p and Xstrata was 44p weaker at 2221p. Plumbers merchant Wolseley was off 17p at a1246p amid worries over the US housing market.

Argos and Homebase owner Home Retail Group took a tumble (down 9¼p to 399¼p) after JP Morgan started its coverage of the stock with an underweight rating citing concerns over growth.

Chemicals group ICI was up ¾p to 399¾p ahead of its result on Thursday but jittery investors sent Imperial Tobacco down 15p to 1839p and chip maker ARM Holdings 4p lower 109p ahead of their figures which are due today.

Talk that a consortium led by QinetiQ is the lead contender for a Ministry of Defence contract worth more than £10bn, lifted shares in the defence research group 5½p higher to 188p.

The Metrix consortium is thought to have edged ahead rival consortium, MC3, led by BAE Systems (up ¾p at 415¼p) in the race for the contract to support the training of Britain's armed forces for the 25 years.

Well-received maiden results from specialist lender Impact Holdings sent its shares up 1p to 10½p. The group, which specialises in the buy-to-let council house market, made a first half profit of £400,000 compared with a £80,000 loss last time.

ImmuPharma was up 3½p to 73½p after good news on its potential treatment for Lupus. The early stage biotech group said a phase II trial of its IPP-201101 drug candidate had shown 'a significant clinical improvement' in patients. Analysts believe the potential market value for the drug could be between £2bn-£3bn.

Computer games group Empire Interactive jumped 1.6p to 6¾p after agreeing to a 7p a share takeover bid from US investment firm Silverstar, valuing it at £4.75m.

• Research has found that two types of proteins in the blood can act as indicators for an increased risk of Alzheimer's disease. This is good news for biotech group Proteome Sciences.

The Aim-listed company analyses proteins to see if it can identify them as markers for illnesses. It owns the commercial rights for the use of these protein markers in Alzheimer's. Shares rose 3½p to 63p following publication of the research in the journal Brain.

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