Market report: Investors put cares behind them and follow Wall St

Shares achieved their best gain for more than a month as anxieties about interest rates and the strength of sterling were submerged by New York's continuing display of confidence. Footsie climbed 32.1 points to 3,958.2 and supporting shares were often in exuberant form.

Railtrack was on the express line, helping the more positive mood. It led blue chips, with a 38p gain to 323p following its results.

The atmosphere was receptive for takeover stories with Cookson, the industrial materials group, jumping 17p to 236.5 in brisk trading. BBA, which retired hurt after attempting to barge into the Lucas Industries/Varity merger, and Johnson Matthey, the metals group, were in the frame. Other candidates were Charter Consolidated and Siemens, the German group. A bid of around 280p on Monday was the popular guess.

Since June Cookson's shares have had a torrid time, falling from 327p. In recent weeks the agony has been compounded by a series of profit downgradings. With the shares so weak a takeover story, particularly on a Friday afternoon, was easy to get going. Said one trader: "It's just a ramp".

House of Fraser, the struggling department store chain, was back in the speculative spotlight - up 9.5p to 151.5p. Once again Burton was the expected predator.

Among the electricity distributors it was the turn of Southern Electric to get the takeover charge. It jumped 28.5p to 706.5p on suggestions it would be the next for a US strike. With Northern Electric and East Midlands Electricity already under US attack Southern is one of only three of the original 12 privatised electricity groups still free from takeover action.

The others, London Electricity, and Yorkshire Electricity, progressed with London up 20.5p to 626p and Yorkshire 7p to 735.5p. The generators were active with PowerGen, on Goldman Sachs support, up 11p at 565p and National Power, figures next week,10p at 445p.

Waters, where bid action has been much more muted, made headway with Thames gaining 7.5p to 568.5p.

Berisford International, the Magnet kitchens group, added 12p to 118.5p after disclosing plans to buy in part of its 5 per cent convertible loan stock. It repeated that profits, to be announced on Friday, would be pounds 25m before exceptional costs. Limelight, a kitchens and bathrooms group, recovered from early uncertainty to close at 182.5p against a 175p placing.

Wm Cook, the engineer, surged 84.5p to 325p as Triplex Lloyd mounted a cash and shares bid which achieved a quick rejection. Triplex edged ahead 1.5p to 208.5p. Cobham, the aerospace group, continued to prosper from the Henderson Crosthwaite investment meeting, rising a further 11.5p to 605.5p.

P&O steamed ahead 2.5p to 593p; stockbroker John Siddall is positive. It sees little changed profits of pounds 320m this year but pounds 370m next. "After five stagnant years it is hoped that a more dynamic management style will refocus group activities, cut borrowings and introduce a growth strategy", it says.

Allied Domecq was little changed at 454.5p as Societe Generale Strauss Turnbull cut its forecast by pounds 20m to pounds 610m.

Hambros lost 8.5p to 235.5p. Vulture fund Regent Pacific has abandoned its attempt to shake up the bank. It failed to win enough support from other shareholders and will, it is feared, eventually dump its 3 per cent shareholding.

Manchester Utd rose 8p to 538p, still reflecting the possible pay-as- you-view bonanza. There was also, once again, suggestions that takeover action could be near. Tottenham Hotspur scored a 27.5p gain to 572.5p.

Inspirations, the holidays group, fell a further 6p to 73.5p after a profits warning.

But Dawson, the newspaper distributor, produced a profit upgrade. It said results due next month will "be well ahead" of market estimates. It had been expected to produce pounds 7.5m; around pounds 9m is now the target. The shares, a founder member of AIM at 475p, jumped 237.5p to 1,912.5p.

Eidos, the computer group, rose 40p to 745p as shareholders approved its ADR listing. Last month ABN Amro Hoare Govett said the company had built a computer games business worth 1,200p a share, suggesting profits of pounds 9m this year and pounds 14.5m next.

CRT, a recruitment and training company, edged ahead 2p to 275.5p. It has acquired Link-Up Services, a recruitment business, for pounds 6m. More takeovers are signalled. In August Larry Ellison, chief executive of Oracle, and former junk bond king Michael Milken acquired control.

Taking Stock

r Lazard Smaller Equities, an investment trust, firmed to 130p, reflecting Invesco's arrival. The trust, which has climbed from 106p since the spring, will change its name to Invesco Enterprise and adopt a new investment policy. The change, in the normally staid world of investment trusts, is an embarrassment for the Lazard investment operation. In what amounted to a shareholder revolt the trust's directors were forced to change managers.

r Barasford arrived on AIM at 7p. It is a similar operation to Gander, another AIM company which specialises in upmarket residential properties. Barasford's flotation raised pounds 4m at 6p a share. It intends to adopt an aggressive acquisition policy. Gander is 12.5p against an 8p launch last year.