WEDNESDAY MARKET CLOSE: Latest bid rumour sends shares wild

Investors in medical devices maker Smith & Nephew endured a rollercoaster ride as rumours of an approach by a US rival were conclusively denied.

Jasper Lawler, market analyst at CMC, said: “A report that Stryker was looking to make a bid for the company drove the price up 17 per cent before it collapsed back down after the rumour was officially denied.”

But with M&A fever gripping the City, Smith still topped the FTSE 100 risers’ board, closing more than 4 per cent higher at 993.5p. The wider index made more modest gains, up just 6.28 points at 6,851.22.

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London Stock Exchange itself was also higher, its shares gaining 49p at 1,955p after a broker upgrade on the back of its bid for Russell Investments, owner of the Russell 2000 benchmark index.

Shares in Royal Bank of Scotland rose in the wake of a report that it was preparing to shed up to 400 jobs in its US trading businesses over the next 18 months as it slims down operations in the face of tough new regulations in America. It was 4p higher at 343.1p

Royal Mail was the biggest top flight faller after broker Cantor Fitzgeral re-iterated its “sell” rating and lowered its target price to 480p. The shares slipped 14.5p to 516p.

Drugs giant GlaxoSmithKline was under the weather after it disclosed that it was being investigated by the Serious Fraud Office (SFO). With its commercial practices now facing a formal criminal probe, the shares dipped 26p to 1,608.5p.

Glasgow’s Weir Group saw shares drop 20p at 2,584p after it disclosed that Finland’s Metso had rebuffed its second takeover approach, and that it now no longer intended to pursue a deal to create a £9 billion engineering giant.