Market Report: Sainsbury's lifted by 'M&S joint bid' speculation

The market performed strongly on Friday although it looked like traders had hit the pubs early, judging by some of the bid chat doing the rounds. The top rumour of the day was a potential counter-bid for J Sainsbury. Talk down the frozen food aisles was of an unnamed private equity company teaming up with Marks & Spencer to launch a 700p-per share bid.

The emergence of a possible rival bid to the Qatar fund Delta Two sent Sainsbury's shares up 4p to 584p. M&S fell 3p to 637p. One trader believed the move unlikely. "It is probably some arbitrage fund trying to squeeze a few more pence out of the Qataris," he added.

There were also bid rumours circling Experian Group, the financial IT company, which sent the stock up 7.5p to 549p. The talk was of a tie-up with Royal Bank of Scotland's Lombard Direct division.

The market opened strongly for a third consecutive day, led up by the miners. Investors piled into the sector as commodity prices strengthened, with Kazakhmys proving the pick of the bunch, closing up 4.59 per cent at 1,596p.

Elsewhere in the sector, Anglo American was up 2.92 per cent to 3,343p after revealing its Tarmac division was to buy the remaining 50 per cent stake in United Marine Holdings from Hanson Quarry Products Europe, a subsidiary of HeidelbergCement.

The FTSE 100 was bolstered by strong rises in New York, after the US non-farm payroll data came in stronger than expected, climbing 32.8 to 6,580.7

A bullish note from Bear Stearns sent Yell Group roaring up. The directories business firmed 3.06 per cent to 463.25p after the broker slapped an "outperform" target on the stock. Bear said its 10 per cent discount to the rest of the media sector was unjustified, as it was more resilient to the threat of online substitution than expected.

On the downside, British Land dragged the housing stocks into the red after it pulled the proposed sale of its Meadowhall Shopping Centre. The news sent the stock sprawling 3.44 per cent to 1,124p after it withdrew marketing because of the credit crisis. Seven of the 10 worst blue-chip performers were in the property sector. The weakest was Hammerson, which closed 4.26 per cent down at 1,168p.

Northern Rock gave up some of the previous day's gains as it emerged it had again gone cap in hand to the Bank of England. The stock rallied late in the day on rumours of interest from Temasek, a Singapore fund, restricting its fall to 3.2p lower at 158.5p. Elsewhere in the sector, HBOS fell after ABN Amro downgraded it from "buy" to "hold", saying its 175 per cent loan-to-deposit ratio looked high. The banking group weakened 1.15 per cent to 948p.

Shares in the budget carrier Easyjet took off after it said pre-tax profits for the year would be up more than 50 per cent. The airline finished 4.38 per cent higher at 571.5p. Its statement said the airline hoped to add 15 per cent capacity this year and improve the return on equity.

The structural steel specialist Severfield-Rowen was another strong performer after shareholders approved its takeover of Action Merchants and Dalton Airfield Estate. The results of the EGM strengthened the shares 4.04 per cent to 2,110p.

Elsewhere, Alfred McAlpine was up 10p to 510p after rumours of an approach. Speculation has swirled around the group for some months since it announced it was to split its support services and construction business into two listed companies in August.

The worst performer on the mid tier was Bradford & Bingley. The bank followed Northern Rock and Alliance & Leicester down, falling 6.48 per cent to 285p.

Another faller on the second line was the fund manager Ashmore. It shed 3.4 per cent to 291p after UBS put a "neutral" rating on the stock on valuation grounds. The Swiss broker said it had outperformed the sector after rising 27 per cent in a month.

Notwithstanding the penny stock Legendary Investments, the best performer among the small caps was Centurion Electronics, marching up 26.09 per cent to 7.25p after a positive update. Investors bought into the group, which develops in-car electronic gadgets, after it announced "satisfactory progress with regard to the ongoing funding of the business".

Avon Rubber enjoyed a 17.86 per cent bump after the US military approved its gas masks. The government is expected to order 100,000 of the masks per year for the next five years. The stock closed at 181.5p.

After a 20 per cent rise this week, the WH Ireland board released a statement yesterday morning saying it was in talks over a potential takeover. The news it had received a number of approaches boosted the stock 17.5p to 189p.

Cape Lambert Iron Ore slumped 16.84 per cent to 19.75p after it pulled out of talks to sell a 70 per cent interest in the group to the Chinese investor Ding Liguo for A$240m (£105m).