It was the usual mix of bid rumours, a German strike, or perhaps more fundamental considerations, such as buoyant unit trust sales. Rolls-Royce drew strength from its US presentations, climbing 3p to 244p.Perpetual, the fund management group, was back in the limelight with a 132p gain to 2,345p. Gerard Pelisson, joint chairman, said: "We are still awaiting Granada's offer terms but when they come we will be among the most interested parties."To honour its commitment to slash its Forte debt mountain by September Granada could feel a Meridien sale is its best option. The 86-strong chain, which has also attracted former Forte chief Sir Rocco Forte, should be worth more than pounds 700m.Stories Hanson was on the verge of selling its stake in National Grid failed to be substantiated and Grid shares fell 3.5p to 198p.Imperial Chemical Industries' flat quarterly results - and its failure to acknowledge any share buy-back plans - left the shares nursing a 28p fall to 926p. Biotech took the competition in its stride, up a further 48p to a peak of 2,808p.Granada was squeezed ahead 2p to 842p as the sale of the Forte Meridien hotel chain looked near. Accor, the French group, decided to make it known it had put together the resources to buy Meridien. It has apparently created a number of compounds which could have cancer uses.

What intrigued many was the suggestion Chiroscience had developed compounds superior to those being produced by high-flying rival British Biotech, due to make an important presentation next month. The supporting index was again on a roll, up 8.6 to another peak of 4,553.3.The outstanding performer of the day was not big enough to claim membership of either index. Chiroscience, with a stock market value of around pounds 300m, surged 117.5p to 400p.The excitement stemmed from an analysts meeting at which upbeat comments were made about the group's drugs pipeline, including its cancer drug. NP fell a further 8p to 556p and PowerGen 15p to 555p.Some of the distributors perked up as PG underlined the market's feeling that Mr Lang's decision to block the NP & PG bids for Southern and Midlands Electricity left the distributors at the mercy of overseas marauders.Most distributors advanced with the market convinced the electricity battle remains alive and dangerous.Trading, Mr Ian Lang's shock statement, has been heavy and speculators have suffered serious losses.The FT-SE 100 index, after an uncertain run, managed to end with a modest gain, up 1.7 points at 3,819.3. Whitehall could have difficulty dismissing Southern's NP ambitions if it downscaled its distribution involvement.In all the excitement the smell of burnt fingers continued to waft around the market. It was uncertain whether the shock intervention by Board of Trade president Ian Lang ended Southern's acquisition hopes. Surely, it was argued, if some generator excursions into distribution were allowed Southern must have a chance of competing for NP. When the NP affair flared it was said Southern was prepared to sell around half of its UK electricity distributor, South Western Electricity.

Although US regulatory restrictions could prevent an early Southern strike the market was not prepared to dismiss the rumours. National Power could be the subject of a dawn raid today. The story swirling around the stock market in late trading was that Southern Company, the American group that wrong-footed the alleged experts with its declaration of affection for NP last week, had decided to plough into the market, regardless of the Government's rejection of NP's Southern Electric takeover bid. It does not, for example, allow foreign participation in the running of its telecommunications networks.A concession to liberalise the Hong Kong telecommunications market may therefore figure among the gestures China would be ready to make in advancing its claim to membership.Last night Hong Kong government officials were saying that the existing monopoly would not be broken but were giving no guarantees about what would happen if the current network fell under BT's control.. China resumes sovereignty over Hong Kong next year and is carefully watching how the outgoing administration deals with its privately-owned utilities.China is keen to gain admittance to the WTO and is having difficulties doing so because of its many trading practices which are viewed as anti- competitive. Past experience suggests that if the Chinese government had a strong view, it would have been forcefully expressed by now.