THE British market succumbed to the August holiday spirit yesterday, with share prices drifting sideways in modest volume. The FTSE 100 index traded in a range of just 14 points during the day.
Nevertheless, the leading index recorded its seventh consecute gain, albeit only a 0.3 point rise to 3811.4.
After all the spurious bid rumours that have been circulating recently, it was almost a relief to see an actual merger - ironically one that few expected.
The tie up between United Friendly and Refuge Assurance was seen as a further step towards the consolidation of the insurance sector, where there is scope for considerable cost savings.
The deal pushed up United Friendly's shares by 14 per cent, gave a lift to other small insurance groups such as London & Manchester and enabled the FTSE Mid 250 index to outperform Footsie on the day; the junior benchmark managed a 9.6 point rise to 4318.6.
Otherwise, there was little to inspire investors. Wall Street provided some support at the start - after a 22 point gain in the Dow Jones Industrial Average on Wednesday - but the US market drifted lower when it opened yesterday, and the Dow had dropped by around 26 points by the close of London trading.
The "bid rumour of the day" was a revived hope that someone might bid for Schroders, the merchant bank and asset manager. But speculators will be hoping that the story has more staying power than Wednesday's rumour that Reed might bid for Reuters or Pearson; in the event, Reed revealed the £100 million sterling purchase of Tolley, the specialist publisher.
Volume slipped back to holiday levels yesterday, with 638.3 million shares traded by the 6 p.m. count. The value of retail business was £2.3 billion sterling.
