A REASSURING set of producer price numbers from the US saw Wall Street race higher in early trading and gave British equities a substantial shot in the arm, enabling the FTSE 100 index to finish a troubled week with a marginal rise.
There were other powerful forces at work in London, including a fresh burst of takeover speculation, particularly in the insurance sector where a late rum our was that Allianz, the German insurance group, could be about to bid for Sun Alliance. Turnover in Sun Alliance reached a hefty 10 million, the fourth heaviest in the FTSE 100 index.
The latter shocked the market last week by announcing a merger with Royal Insurance, a move that would create Britain's biggest insurance group.
Energy stocks were also well to the fore, with British Gas leading the Footsie performance table ahead of Monday's Ofgas report into Transco's pipeline transmission charges. Shell shares continued their excellent performance.
Other takeover stories helping to ginger up the market included talk that a move against Lucas, the motor components group, was imminent. The usual predatory suspects, GKN, Germany's Siemens and General Motors of the US were mentioned.
Lucas has already announced it is holding talks with Varity of the US about closer ties.
