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London equities I

LONDON: Further bid activity in the water sector and firmer index futures, together with a resilient Dow, helped the FTSE 100 to close with a 15.5 point rise at 3,775.7.

Southern Water ended 46p up at 987, after an agreed 1.6 billion stg bid from Southern Electric, which topped Scottish Power's offer made on Tuesday.

Dealers said the prospect of a continuing takeover battle and focus on other stocks in the sector helped underpin the general market. "Southern's offer has flushed out a few underweight funds and there's the possibility of more (bid) activity", one trader said.

I don't believe this is a knock-out bid", said one analyst, who declined to be named. "I'd be amazed if Scottish Power packed its bags and went home to Glasgow after this".

Cadbury-Schweppes posted a robust 10-1/2p rise to 488-1/2p after SG Strauss Turnbull upgraded the stock to "hold" from "sell". Dealers said ABN AMRO Hoare Govett were positive on the stock.

Carlton Communications gained 3p to 481 after reporting a 19 percent rise in half year pre-tax profits to 143 milion stg, above market forecasts. The results were helped by a 33 percent rise in film and television services profits, analysts said.-Reuter