There was a two-way pull in the market today, with oil stocks in decline but a bid for Scottish & Newcastle setting the brewer's shares alight.
After months of speculation, Danish brewer Carlsberg and Dutch rival Heineken announced a possible cash offer for S&N with a view to splitting the company up between them. Market rumours suggested the bid might be worth 800p a share.
"Vague initial whispers are of a 800p per share cash offer, which would value the company at around £7.5bn," said Martin Slaney of GFT Global Markets.
Various Carlsberg executives had given mixed signals recently over whether it was interested in S&N or not, but today's announcement settled that once and for all.
Before the news S&N shares were around 5% higher on rumours of a bid. On the confirmation they soared 119.5p to 756p. Dealers said other players such as SABMiller could enter the fray, especially since S&N was not exactly welcoming in its response to the offer.
Overall, bid speculation seems to be back with a vengeance now, after a period of calm during the worst of the credit crunch.
The supposed takeover targets from earlier this week slipped back on profit taking. Specialist chemicals group Johnson Matthey edged down 1p to £17.52 after Monday's excitement when it was rumoured to be in the sights of US group Praxair. BG, the gas and oil group, slipped 3p to 911p today following yesterday's talk of a £12 a share bid, as Dredner Kleinwort downgraded BG from buy to hold. The company was also hit by a decline in the oil price after its recent surges, news which also left BP 7.5p lower at 619.5p and Royal Dutch Shell 2p lower at £20.84.
Miners had a mixed day, falling initially after disappointing third quarter figures from Rio Tinto, but mostly recovering lost ground during the day. All except for Rio, that is, which closed down 65p to £43.54.
Among the risers Wm Morrison Supermarkets added 11.75p to 298.75p after yesterday's upbeat sales figures for the grocers from TNS Worldpanel. Sugar group Tate & Lyle was 32.25p better at 455p as Panmure Gordon issued an update on the company, which last month issued its third profit warning in less than a year.
Panmure said: "It was reported yesterday that the EU is likely approve the import of four genetically modified crops at a meeting on 24 October. One reason for Tate's more cautionary outlook was weak corn gluten feed prices in the US which we believe was a direct consequence of the European import ban. While this is a potential positive for Tate, the company still needs to better explain itself, and senior management positions remain in question."
But it added: "We have two caveats. Firstly, we cannot get Tate's numbers to add up, casting doubt on whether there are other issues at work (ie we calculate the corn oil price rise should have more than offset the corn gluten feed price decline). Secondly, more GM corn strains are likely to be planted in the US, and we do note know whether these will be allowed into the EU.
"Tate next reports to the market with its interims on 31 October. Whether senior management remain in place beyond that still remains in doubt, but much more openness will be called for."
ICAP, the world's biggest interbroker dealer, added 29p to 548p on talk that it was benefiting from an increase in derivatives trading by the banks.
Housebuilder Barratt Developments - savaged by analysts at Dresdner Kleinwort last week as the "worst in class" - rose 18p to 694p. Three directors of the company, including chief executive Mark Clare and finance director Mark Pain, have between them spent more than £400,000 on buying shares.
Insurance group Aviva gave a strategy presentation saying it planned an extra £350m of annual cost savings, and said it wanted to boost its Asian presence. But the market was unimpressed and its shares lost 16.5p to 719.5p.
On the economic front, the Bank of England minutes from its interest rate setting meeting earlier this month showed one of the nine members voting for a cut, although the rest wanted rates kept at 5.75%.
There were also unemployment and earnings figures out today, and Rob Carnell of ING Bank said: "Offsetting any dovish tone given by these minutes, the UK labour market showed the claimant count rate remaining at 2.6%, following a drop in unemployment of 12.8 thousand from the previous month. Average earnings also rose to 3.7% from 3.5% (including bonuses). This is still a benign level, but the upward direction might worry some monetary policy committee members set against what they suggested in the minutes was a slightly tightening labour market.
"Whilst the full impact of tighter credit conditions in the UK has yet to be reflected in the data, and a pre-emptive cut by the BoE cannot be ruled out, the current run of data suggests that we are more likely to see the UK easing cycle begin in earnest from the beginning of next year. We expect rates to be cut by 75 basis points by the end of 2008."
Overall the positives outweighed the negatives and the FTSE 100 closed 63.4 points higher at 6677.7. It was helped by an opening rise on Wall Street despite a drop in new US housing starts.
Packaging group DS Smith climbed 15.75p to 216.p after it said first half profits would rise from £29m to more than £50m, while telecoms testing group Spirent Communications recovered 2.5p to 63.75p after yesterday's falls in the wake of poor figures from Ericsson.
Support services group VT climbed 35p to 616p as the EU approved the merger of its shipbuilding operations with those of BAE Systems. There was also vague bid chat surrounding VT.
Meanwhile Mike Ashley's Sports Direct jumped 15.5p to 156.5p with nearly 30m shares traded. The company continued its buyback programme but suggestions that Icelandic group Baugur - which recently amassed a 1% stake - was buying more shares seem wide of the mark.
Lower down the market technology group Qonnectis jumped 0.7p to 1.725p after it won an order from Thames Water.
But voice over internet group Citel slumped 23.5p to 14.5p after it warned its full year profits would not meet market expectations, and it was currently in the middle of a cost cutting programme. Panmure Gordon cut its price target from 56p to 40p.