Market Report: Gloomy session ends in buzz of bid speculation

AS A session dominated by the Barclays debacle was closing, the stock market picked up hints that a big takeover would be announced today.

Charter Consolidated, Cookson Group and English China Clays were immediately selected as the favourites for corporate activity.

One suggestion was that Watts Blake Bearne, where 45 per cent of the capital is for sale, could feature in the action.

Cookson and ECC have given some observers the impression they are gearing for expansion. They are run by ambitious chief executives, Dick Oster at Cookson and Andrew Teare at ECC, who have reshaped their charges and could feel the time is ripe for expansion.

Charter, which has completed the pounds 342m sale of its 38 per cent interest in Johnson Matthey, the metals group, is cash rich and keen to expand.

It is casting round for a suitable buy with Marley, the building products group, and Vickers, the engineer of Rolls-Royce fame, among the names in the frame. The possibility that Minorco, the South African group, could seek to sell its 35.8 per cent Charter interest was also being considered.

BTR, perhaps mounting that long-suspected bid for Lucas Industries, and a strike by Morgan Crucible were other possibilities being discussed.

Carnaudmetal Box, where MB Caradon has put its 25 per cent stake up for sale, jumped 157p to 2,825p.

But until the late hints of bid action, attention had been on Barclays, with Seaq putting share turnover at 53 million. At one time the price was down 54p. It closed 41p off at 392p. The shares would have fallen much more steeply if US investors had not come to the rescue, mopping up some of the stock being unloaded by disillusioned UK institutions.

The banking group was the most heavily traded option with call contracts outnumbering puts more than two to one.

As Barclays crumbled Standard Chartered again drew strength from talk of bid action, gaining 10p to 702p. TSB Group also attracted bid speculation, up 4p at 175p.

The FT-SE 100 index fell 13.8 points to 2,904.8, with many drawing encouragement from its reluctance to fall below 2,900. The FT-SE index measuring the 250 shares that follow the top 100 underlined the continuing interest in second-liners, climbing 10 to a 3,087.9 peak.

The German failure to reduce interest rates and a dull New York opening intensified the market's caution.

Racal Electronics, however, bucked the trend. Talk of profit upgradings were in the air and it was suggested Smith New Court had lifted next year's forecast by pounds 5m to pounds 67m. The shares rose 15p to 205p.

SNC also appeared to stir Wm Morrison, the supermarket chain. There was talk the securities house wanted to buy nearly 5 million shares at 165p. Morrison rose 9p to 169p. It appeared SNC completed at least part of its order. Tesco fell 2p to 245p as a 3.5 million line sought a home.

Nurdin & Peacock, the cash and carry wholesaler where SHV, the Dutch investment group, has built a stake, jumped 11p to 196p. SHV already has cash and carry interests in this country and a bid for N&P has long been expected.

Imperial Chemical Industries, up 17p to 1,250p, and British Steel, 0.75p higher at 86.25p, enjoyed US support.

Arjo Wiggins Appleton, the packaging and paper group, was actively traded, rising 9.5p to 185.5p. A buyer for 2 million shares, apparently expecting this month's profits announcement to be better than most anticipate, provoked the excitement. The market is guessing that AWA will produce pounds 160m, down from pounds 232m.

British Aerospace improved 10.5p to 283p. Henderson Crosthwaite, for long bulls of the shares, calculates a 600p break- up value and suggests the Rover car side will make a pounds 50m trading profit this year. The 16 per cent advance in car sales last month also helped BAe. Inchcape, figures later this month, was another to score from the improved car sales, up 10p at 623p.

BAT Industries remained under the 'Billary whip', falling 15p to 933p on the threat of higher US tobacco taxes.

Allied-Lyons slipped 11p to 582p as another downgrading, this time from Cazenove, materialised. But Boddington Group, reflecting its heady profit advance, jumped 14p to 230p.

Kingfisher fell 14p to 529p with some pondering the merits of the takeover of the French Darty group.

Blue Circle Industries, an old takeover favourite, slipped 2p to 228p. Yamaichi, forecasting profits of pounds 75m, said 'take profits'. Shaw & Co., forecasting pounds 83m, said 'buy'.

First National Finance Corporation disclosed refinancing problems and fell 16p to 61p.

Asda Group, declined 0.5p to 64.25p and Glaxo Holdings, down 10p at 668p, were the most sought after shares by private investors in February, said Sharelink, the retail execution- only stockbroker.

Although blue chips gave ground second-liners were again active, with the FT-SE 250 index hitting a new peak, up 10 points at 3,087.9. The FT-SE 100 index closed 13.8 lower at 2,904.8. Turnover reached 660.1 million shares with 35,907 bargains completed. Government stocks slipped back

An Australian-quoted UK drug company has obtained an ADR listing on the US Nasdaq stock market. Trading started this week in Cortecs International ADRs at around dollars 3.50. The company develops new drug-delivery systems. Cortecs is the third UK group to arrive on Nasdaq in the past year - following Cantab Pharmaceutics and the fully quoted British Biotechnology.

The Manchester stockbroker Henry Cooke Lumsden believes shares of Central Motor Auctions are a good recovery play. Profits last year reversed from just over pounds 2m to pounds 850,000, but Henry Cooke expect pounds 1.2m this year and pounds 1.5m next. The shares, which have been as high as 143p, were unchanged at 108p. They arrived on the Unlisted Securities Market five years ago at 80p.