As leading shares recorded their second week of gains, supermarket group Morrisons was in the spotlight after a brief flurry of takeover speculation.
Reports that members of the founding family had approached private equity firms with a view to buying back the business sent Morrisons' shares flying, albeit briefly. Reality soon set in, as investors focused on the latest figures from Kantar Worldpanel showing the main supermarkets continuing to lose market share to discounters such as Aldi and Lidl.
Analysts at Exane BNP Paribas yesterday issued an underperform recommendation on Morrisons and cut their target price from 230p to 200p, pointing to poor trading and the unlikelihood of a debt-funded buyout.
They said: "Morrisons is haemorrhaging market share and has a pricing problem requiring painful margin cuts to fix. The dividend no longer looks secure . . . management is pressured and bid speculation is rising but a leveraged buyout or carve-up look unlikely."
Morrisons fell 2.3p yesterday to 233.8p, a 2% decline on the week.
Overall though, the market was in a brighter mood. The FTSE 100 finished at 6663.62 yesterday, up 4.2 points on the day and 92 points on the week. Investors took heart from soothing comments from central bankers, with Janet Yellen using her first public testimony as chair of the US Federal Reserve to underline that the bank would continue to trim its bond buying programme, but only if the economic news was strong enough to support such a move.
Bank of England governor Mark Carney did a U-turn on his forward guidance but signalled interest rates would remain at low levels until at least next year.
Positive European data, including yesterday's 0.3% rise in eurozone GDP in the last quarter, also helped sentiment ,while the market took political turmoil in Italy in its stride as prime minister Enrico Letta was ousted by rival Matteo Renzi.
Better than expected Chinese trade data supported the mining sector throughout the week. Antofagasta added 33p to 938.5p yesterday and BHP Billiton was 17.5p better at 1888.5p. But Anglo American dipped 14p to 1519.5p after it reported a 6% rise in underlying profits to $6.6bn, ahead of expectations, but made a $961m loss after impairment charges.
Helped by a recovery in the gold price as the dollar weakened, Mexican precious metals miner Fresnillo rose 49p to 971.5p, while elsewhere International Airlines Group, owner of SpanishCats:IAG">British Airways and Iberia, climbed 4.4p to 446.4p after it announced a pay agreement on Thursday with its Spanish pilots. Deutsche Bank issued a buy note and raised its target price from 430p to 506p.
Oilfield services supplier Petrofac put on 52p to pounds 13.17 after an upgrade from Berenberg bank, which moved from hold to buy.
GlaxoSmithKline added 11.5p to 1664.5p amid reports it could bid for US biopharma group Arena. Meanwhile Barclays raised its target price from pounds 15.45 to pounds 15.75.
The week saw a number of shock profit warnings, notably from Tate & Lyle and Rolls-Royce. Tate slumped 16% on Thursday and lost a further 2.5p to 657.5p yesterday, while Rolls lost nearly 14% following its figures and ended down 20p at pounds 10.25p yesterday.
But Shire added 77p yesterday to pounds 32.19 following a better than expected 36% rise in fourth quarter earnings, helped by growing demand for its rare disease drugs.
The bank reporting season continued but with as much focus on pay packets as profits. Barclays slipped 3.4p to 253p yesterday while Lloyds Banking Group lost 0.87p to 80.45p.
Finally a stellar performance came from Actual Experience, a technology company spun out of intellectual property company IP Group and Queen Mary university in London. It joined the junior market Aim at 54.5p on Thursday, soaring to 245p on its first day of trading before slipping 17.5p yesterday to close the week at 227.5p.
Investors took heart from Janet Yellen saying the Fed would only trim bond buying if the economy was strong enough