Dealers took a shine to the steel giant Corus this morning. The initial impetus was news that rival Mittal had increased its hostile bid for Arcelor by a third to 25.8bn (£17bn). This prompted hopes that consolidation in the industry would continue and that Corus was likely to be a prime mover.
A note from Deutsche Bank helped the positive mood. The broker raised its price target and told clients to buy the shares, partly on the back of recent steel price increases. Corus had added more than 4% by lunchtime.
Elsewhere the mood was still jittery, with Wall Street down but Asian markets, the dollar and gold all steadier. An options expiry in the morning passed without too much strife, but after rising around 45 points, the FTSE 100 was down 5.8 points at 5665.8 by midday.
Much will depend on how the Dow Jones industrial average opens this afternoon. But on current form the leading index - down around 4% since Monday - is heading for its worst weekly fall since March 2003.
British Airways helped contain the damage with a set of good full year figures showing a 21% increase in profits to £620m. Higher ticket prices and increased demand helped offset the effects of rising fuel prices, and its shares climbed 3.8%.
Other risers included the housebuilder Persimmon, recovering from yesterday's interest rate inspired sell-off. Associated British Foods was around 1% better after announcing plans to buy 51% of Illovo, Africa's biggest sugar producer, for £317m. Panmure liked the look of the deal and recommended buying the shares.
Lower down the share league, the furniture group MFI rose nearly 7% to 117.75p after revealing it had received a number of approaches to buy its retail stores. But analysts were sceptical that a deal to effectively break up the company could be easily achieved.
The company is one of the most shorted stocks on the market - where investors effectively bet the shares will fall - and analysts at Evolution said anyone in this position has to make up their mind what to do.
Evolution said if MFI managed to sell the retail business the shares could be worth 120p; if not the company could be worse off than before because the distraction of an attempted disposal would slow down its plans to cut costs at the business. Evolution comes down on the side of selling, with a 75p target for the shares.
At Seymour Pierce, Richard Ratner also advised selling, suggesting no one would pay to take away the retail side, and MFI could still be responsible for the pension liabilities for up to six years if the purchaser happened to go bust. On the other hand, Capital Spreads reported the June option price rising 11p to around 121p.
Moving lower during the morning was British Gas-owner Centrica, down 2.6% after it admitted it had lost a net 350,000 UK customers since the start of the year after raising prices.
The construction group John Laing slipped 3.8%. The company's chief executive, Andy Friend, is leaving - to be replaced by the current finance director - but investors focused on news that results at its Chiltern Railways business would be hit by the collapse of tunnel works in the middle of last year, which affected passenger numbers.
The collapse happened during the construction of a new Tesco store and the supermarket group has admitted liability. Laing hopes to agree compensation, but this could end up going to arbitration which could take until the end of 2007.
Next Monday could see some confusion in Unilever shares, down 6p yesterday. That is the day a restructuring is due to take place to simplify the relationship between the UK and Dutch sides. The upshot is that UK investors will receive nine shares for every 20 they hold.
So the current price of around 528p will become 1173p. Barclays stockbrokers has a target of 1355p on that basis.
Among smaller companies, Transense Technologies added 1p to 75p after its annual meeting. The company has licensed its tyre pressure monitoring systems to Michelin for use in trucks, and production is now expected to start in the third quarter of this year - perhaps September.
The rest of the annual meeting statement was similarly upbeat, including a South African contract with Honeywell to manufacture Transense sensors.
