Little Prism Leisure jumped 8.5p to 71.5p on the prospect of bid action.Weekend talk that Newcastle United was in the bid frame, prompted a 9.5p gain to 85.5p, and rivals Sunderland rose 17.5p to 457.5p after ex-BSkyB man David Chance arrived in the boardroom.Some retailers missed the fun. Cash-and-carry chain Booker improved 6p to 142.5p on talk of a consortium offer.Publisher Cassell doubled to 100p as Macmillan Publishing appeared with a 100p-a-share offer, which was rejected. Golden Rose, the radio group, moved 4p higher to 61.5p after sounding takeover action, and Viglen Technology firmed to 23.5p as the mandatory offer for the computer company was launched by Alan Sugar. If he did it would, the market believes, open the way for Glaxo to renew its bid ambitions, which were dramatically ended early this year. Glaxo rose 111p to 1,661p and SB 37.5p to 616p.BAe flew 35p higher to 391p.

It refused to lend credence to the speculation of a German deal but did not issue a denial. It said it had for years been involved in talks with European companies about restructuring the aerospace industry.General Electric Co, a long-rumoured BAe bidder which could intervene if a deal with the Germans was announced, gained 24p to 460p.Others to catch the corporate mood included Tarmac, up 13p to 93p, after saying that it is in merger talks with Aggregate Industries, 7p harder at 63.5p. Then New York seemed set to build on Friday’s advance.Gilts suffered falls of approaching a point as the fall-out continued. Some selling was said to be due to hedge funds unwinding positions. There were, however, more signs that some investors were merely switching into equities.Drugs were on a high on stories, subsequently denied, that SB’s chief executive, Jan Leschly, intended to resign.

It got off to a flying start on the strength of Tokyo, encouraged by hopes of a deal to ease the country’s banking crisis, and Hong Kong. Such is the volatility of the market that it will be surprising if it has seen the last of this year’s double centuries.In the last two trading days shares have been rampant, with the index surging almost 340 points. In the eyes of many the 5,000 mark enjoys considerable psychological significance.Only last week Footsie achieved its first ever 200-point gain. Politically it is just this sort of issue that bites politicians in the backside.. SUDDENLY IT was just like the days of the bull run again, with shares scoring a record advance, largely on the back of real and rumoured takeover action. Strong overseas markets and the growing conviction that more interest- rate cuts are on the way were favourable influences.

There was also more evidence of switching out of government stocks into equities.
But, as always, it was stories of corporate action which provided the main impetus to the market.Two golden oldies intrigued investors. Yet another spin of the old Glaxo Wellcome bid for SmithKline Beecham rumour gave drugs a shot in the arm, and British Aerospace enjoyed renewed speculation about a merger with Germany’s Daimler-Benz Aerospace.With further corporate action on the market’s undercard there was a surge of confidence, although a stock shortage perhaps exaggerated some price movements.Even so the market scored its best closing gain, with Footsie up 214.2 points at 5,037.6.It was not the strength of the gain but the return of the index above 5,000 which attracted attention. And they are funds which are not scrutinised in the same way as they would be were they spent by the Government in the UK.If Mr Brown were wise, he would be worrying less about the world economy (about which he can do nothing) and more about the UK contribution to the EU (where he can, like Mrs T, always say no). It is this issue that opened up yesterday.Now that there is a new government in Germany, the EU’s largest net contributor is determined to cut its bill. For many years the UK was the second-largest net contributor on a per capita basis, after Germany, despite the rebates negotiated by Mrs Thatcher Now The Netherlands contributes more on a per head basis.