Traders were playing spot the FTSE 100 bid target again today, and the victim this time was gas and oil group BG.
The company, once part of the British Gas monolith, has been tipped as a takeover target for some while, with Royal Dutch Shell, Russian group Gazprom or even a mining group like Rio Tinto mentioned. Earlier this month Shell was reported to be planning a carve up of BG in partnership with Brazilian group Petrobas. Today the speculation was of a £12 a share bid, which helped push the company's shares 19p higher to 914p.
Yesterday's takeover target, speciality chemicals group Johnson Matthey, came back to earth after it was pumped up by talk of a possible £20 a share offer from US group Praxair. Today, inevitably the profit takers moved in, with a couple of dismissive analysts' notes thrown in for good measure.
Charles Stanley said: "The chemicals sector, in which Johnson, somewhat erroneously in our view, is placed, has been a hot bed of merger and acquisition speculation in the wake of Akzo's ongoing acquisition of ICI. We note that the European chemicals sector is awash with rumour regarding a possible bid for Air Liquide from Dow Chemical following the postponement of Dow's November investor meeting.
"Operationally, we are unconvinced by the potential overlap between Praxair and Johnson Matthey. What Johnson does offer a potential acquirer is strong organic growth in fast-growing markets - autocatalysts represent around 45% of 2006 sales. We remind investors that BASF acquired Johnson's largest competitor, Englehard, in 2006. We suspect that [Johnson's] strong position in both autocatalysts and platinum group metals would encourage shareholders to demand that be recognised in any potential offer.
"The spike in the share price has driven the shares to a forward multiple of 21 x 2008 earnings. In the context of relatively muted earnings growth this year (around 8%) we believe that the shares are now fully valued and lower our recommendation from buy to hold in the wake of these rumours."
Evolution also cut its rating from buy to add with an £18.92 target, while Citigroup said a bid from Praxair was unlikely. "The two companies do not compete in any major area, the only link is that Praxair may buy catalysts from Johnson for its hydrogen production. Praxair has not suggested major acquisitions are part of its strategy and its management has hitherto been focused on raising, not lowering, its return on capital employed.
"We believe Johnson shareholders would fight for a significant premium in the event of an approach. We believe this provides a significant barrier for bidders."
The company's shares lost 87p to £17.53p. Still, it has kept half the 10% gain it made on Monday.
Other fallers included the mining sector, which until now has been one of the main factors pushing the market higher. A downgrade by Morgan Stanley did some of the damage while Anglo American fell 86p to £33.20 after HSBC downgraded to neutral.
Banks were weaker on continuing concerns about the credit crunch - especially after Citigroup's poor figures yesterday - with Royal Bank of Scotland down 12p to 514.5p and Barclays 11.5p lower at 615p.
Credit Suisse pointed to domestic as well as global concerns for Britain's banks: "We think the outlook for the UK housing market is somewhat more difficult than many think. Our advice remains the same - be underweight the UK domestic banks sector."
Northern Rock, however, seems to obey its own rules. At first it fell sharply as its bosses appeared before the Treasury select committee amid concerns shareholders may be left with very little, if anything. But it recovered to 223.5p, up 7.25p.
By the close, the FTSE 100 had fallen 30.2 points to 6614.3, with Wall Street falling for the second day in a row. Dealers cited a number of reasons for caution, including the situation in northern Iraq where Turkey is threatening to mount raids into the country against Kurdish rebels.
Meanwhile a speech on Monday night by US Federal Reserve chairman Ben Bernanke presented a gloomy outlook for the world's biggest economy.
Commenting on the speech Investec economist David Page said: "Bernanke said that financial market conditions had improved, but that a full recovery would take some time and may see some setbacks. He also added that financial market turmoil had significantly affected the Fed's outlook for the economy. We see Bernanke's speech consistent with an October rate cut."
Back in the UK, inflation figures showed year-on-year growth of 1.8% in September, unchanged from August, compared with expectations of a move upwards to 1.9%.
This perhaps gives the Bank of England a little leeway for an interest rate cut, although it will also be conscious of the fact that the crude oil price continues to hit new peaks.
Richard McGuire, a strategist at RBC Capital Markets, said: "These data will also serve to mollify concerns over inflation expectations - a concern that was highlighted by Bank of England governor Mervyn King in his speech in Belfast last week. The other inflation risks enumerated in last week's speech - that of commodity prices and pricing intentions - will, however, likely remain somewhat acute given both the current record price of oil and survey data pointing to unprecedented pricing power on the part of UK producers.
"Overall, today's data provide a discernible boost to rate cut expectations but are not sufficient on their own to prompt an imminent easing."
As for the oil price, its jump to $88 on the Iraqi tensions pushed energy groups higher. Royal Dutch Shell rose 30p to £20.86 while BP was 4.5p better at 627p.
International Power climbed 8.75p to 472p. Deutsche Bank raised its price target from 300p to 450p but kept its hold rating.
"The stock is a play on management's mergers and acquisitions prowess and long term trends in US, UK and Australian power markets," said the bank. "There are risks around acquisition values and the company's optimism about tightening US power markets needs to be proved right to see the stock perform from here."
Condoms and footcare group SSL added 19p to 518p after an upbeat trading statement. After the figures Credit Suisse analysts raised their target price from 500p to 550p, saying: "SSL's interim trading update highlights 9% organic growth in the first half - certainly more than the 5.6% we had pencilled in for the half and full year."
Meanwhile Reckitt Benckiser - long tipped as a predator for SSL - climbed 37p to £29.35.
Online auction group QXL Ricardo rose 35p to £12.90 as Citigroup began coverage with a buy - albeit high risk - recommendation and £14.40 target. It said: "QXL is a key beneficiary of rapidly growing online spend in Eastern Europe. Its leading auction market share provides liquidity to buyers and sellers, reducing risk from competitors (including eBay)."
Back among the fallers, Credit specialist Experian lost 12.5p to 476.5p after Morgan Stanley cut from equal weight to overweight.
Telecoms testing equipment group Spirent Communications dropped 3.5p to 61.25p in the wake of a slump in profits at Ericsson, the world's biggest mobile network manufacturer. Ericsson said sales in the third quarter had been disappointing, leading Spirent investors to be concerned that it could be suffering similar declines.
Construction firm Carillion fell 25.25p to 389p as it made a 570p a share takeover proposal to rival Alfred McAlpine, which was subsequently rejected. McAlpine added 6p to 538p.
Altium Securities said: "Clearly McAlpine is now firmly in play and as a consequence we are upping our price target to 575p and retaining our hold stance. We have suggested since McAlpine's de-merger announcement that an approach was a possibility and today's statement has confirmed this. We retain a cautious stance on Carillion given the high implied price earnings multiple for McAlpine, the possibility of an external counter-bidder and our view that Carillion's own valuation is up with events, although we do recognise strategic logic in the tie up of the two businesses."
Finally SPI Lasers dropped 22.5p to 62.5p as the laser maker secured its financial future but with a deeply discounted placing at 30p a share to raise £10.5m.