Punters rush for supermarket sweep

MOUTHWATERING gossip that top brass from Carrefour, the world's second-biggest retailer, will soon cross the Channel to hold talks with

The close was 4&frac34p higher at 290&frac34p on meaty turnover of 18.6m. Carrefour announced plans to withdraw from Japan and Mexico and use cash from disposals to help revitalise its European operations.

Its chairman, 'Lucky' Luc Vandevelde, is no stranger to the UK High Street, having been in the chair at Marks & Spencer before concern about his other business commitments led to his acrimonious departure.

Vandervelde is a dealmaker at heart and is the sole representative of the Halley family, which owns 13% of Carrefour. Apparently they want to expand in the UK and have given their blessing to a move on Sainsbury.

Takeover speculation has plagued Sainsbury for months. Chief executive Justin King has helped lift market share to 10.6%, but it is still struggling and a million miles away from numero uno Tesco.

Sufficiently worried about a possible hostile bid, King has US investment bank Morgan Stanley on standby to put together a bid defence. But rumours have been rife that major shareholder and Science Minister Lord David Sainsbury would soon relinquish his ministerial responsibilities to mastermind the sale of the company.

'Carrefour is certainly big enough to swallow Sainsbury but whether it would want to take on juggernaut Tesco is another matter,' said a leading analyst.

A wave of interest-rate optimism swept the Footsie 17.2 points up to a three-year high of 5099.3.

Consumer-related sectors bubbled with excitement after dealers heard that two members of the Bank of England's Monetary Policy Committee had voted for a cut in loan rates at the last meeting. The first vote for a cut in two years, coming so soon after Sweden's rate reduction of 50 basis points on Tuesday, raised expectations that UK rates could come down 0.25% to 4.5% as early as August. Cheaper money would be a godsend for the High Street. The sales are in full swing as retailers try to get Joe Public back to spend more amid the worst trading conditions for more than a decade. Next jumped 49p to 1512p, Kingfisher 6&frac34p to 251&frac12p, Boots 15&frac12p to 613p and Marks & Spencer 7&frac14p to 356&frac34p.

The prospect of cheaper mortgages buoyed housebuilders ahead of the sector's reporting season. Berkeley advanced 43p to 917&frac12p, Wilson Bowden 48p to 1158p and Barratt Developments 27&frac12p to 700p. Crest Nicholson firmed 13p to 393p ahead of today's interim figures.

After US venture capital giant Kohlberg Kravis Roberts pulled the plug, Kingston Communications fell 6&frac12p to 64&frac34p. KKR sold 114m shares, or 22.2% of KC, to UBS at 65p a share and the investment bank then sold them to institutional clients. KKR retains 7.6m, or 1.5%.

AIM-quoted Gulf Keystone Petroleum, which is developing oil and gas prospects in Algeria, gushed 4p to 50&frac12p after a large overhang of stock was cleared. Mercator Gold hardened &frac38p to 7&frac58p after announcing positive drilling results from its programme near Meekatharra, Western Australia, including the surprise target at Yaloginda.

Already quoted in Toronto, Canadian investment banking giant Canaccord Capital arrived quietly on Aim. It held as solid as a rock at its introduction price of 432&frac12p, giving it a market capitalisation of £200m.

Confirmation of a bid approach lifted Hotgroup, which operates the largest collection of online jobsites in the UK, 2p to 13&frac34p. Broker Baird says the take-out price could be as high as 20p, valuing the group at around £50m.

Perceived to be one of the best recovery stocks in the market, MOS International edged up 0.03p to 0.46p on turnover of 61m shares. It has entered into a 50/50 joint venture agreement with Crown Corporation to build oil rigs and undertake major capital projects connected with the drilling and exploration industry. MOS is already an existing supplier to several contractors in the sector.