Cable & Wireless rose 4p to 797.5p after ABN Amro said its global phone business is worth an extra 185p.In the Mid Cap, the old bid chestnut DS Smith, the paper firm, wrapped up a 7p rise to 171.5p on talk of a bid, possibly from venture capitalists or overseas rivals. Software group Misys shed 60.5p to 560.25p despite strong interims on fears of a millennium-driven slowdown in orders, while Northern Rock fell 7.5p to 456p after lukewarm results.Rolls-Royce firmed 3.5p to 272.5p amid hopes of a Boeing engine deal, but the US aircraft giant does not want to change its contract with General Electric. However, profit-taking pushed L&G 2.25p easier at 152.5p in massive turnover of 45m shares.Outside the bid zone, ICI climbed 52.5p to 732.5p after surprising the market with better-than-expected figures, while Boots moved 40p better to 801p thanks to an upbeat AGM statement. A merger between Rupert Murdoch’s satellite TV and the Vivendi-controlled Canal + is now more than pie in the sky.Granada was also spurred by news that the Office of Fair Trading could allow operators to own more than 25 per cent of the ITV advertising markets. Rival Carlton jumped 10.5p to 529p on hopes of ITV consolidation, while United News & Media rose 14p to 640.5p amid whispers it might sell its Anglia, Meridian and HTV franchises.The media bid frenzy was completed by talk that the Sky-less Granada could bid for Scottish Media Group, up 10p to 925p, and rumours that Scottish Radio, 27.5p higher to a best ever 1012.5p, could be bought by a bigger competitor.Revived talk of a bid lifted EMI 27p to 550p, while Norwich Union put on 14.75p to 426.75p on good figures from Legal & General and persistent takeover speculation. Pearson, 8p higher at 1238p, sold a similar amount, leaving the Gallic group with 24.5 per cent.

Granada soared 50.5p to 674p on confirmation of The Independent’s story that it was to sell its 4 per cent stake in BSkyB, up 5p to 555.5p, to the French conglomerate Vivendi. The US Federal Reserve chairman warned that a “euphoric” rise in share prices could push US equities to “insupportable” levels. Bond markets were also on the slide, hit by Mr Greenspan’s bearish words on inflation.The smaller indexes could not resist the selling pressure and the FTSE 250 ended 11.7 down at 6,021.8, while the Small Cap dropped 4.8 to 2,730.6.The media sector was excited by deals and regulatory reviews. The trigger for the blue- chip index’s fifth consecutive fall were some hawkish words from Alan Greenspan in the all-important Humphrey-Hawkins testimony. Fellow fund manager Johnson Fry, unchanged at 182.5p, is also a target.The overall market had another drab day, with the FTSE 100 ending 32 lower to 6,297.8 – its lowest point since June. Some believe a French or German player could be interested.However, a UK house such as Close Brothers, down 2.5p to 791.5p, may also have a go after Wednesday’s bid for Rea Brothers Rea closed unchanged at 97.5p after some arbitrage buying. The owner of broker Collins Stewart surged 7.5p to 151.5p in unusually-high volume of 6.1m shares on talk that a larger rival is lining up a bid.

Some traders pointed out that a prolonged European probe into Coke could encourage investors to switch into some of its rivals.The Coke bottler Coca-Cola Beverages was the day’s worst midcapper, pouring 10p lower to 119.5p after the investigators’ visit. Bears fear that further falls could force CCB to renegotiate the terms of its all-share merger with its Greek rival Hellenic.The other big rumour of the day centred on the fund manager Singer & Friedlander. The list of possible partners was long but the US chocolate group Hershey and even the Swiss giant Nestle were two tasty possibilities.The other, more boring, reasons for Cadbury’s rise was the arrival of interim results next week and the European Commission’s raid into Coca- Cola’s offices. The market believes there is no smoke without fire and immediately started talking of a mega-merger.
According to the whispers, Cadbury’s recent disposal of its non-US soft drinks business to Coca-Cola – set to be completed by the third quarter of this year – will leave the group with a focused portfolio of brands which could attract an overseas competitor.

Traders with a sweet tooth gobbled up the stock in the hope of a major deal with a foreign rival. The somewhat wild rumour left Cadbury 23.25p higher at 425.75p in a falling market. Traders said their appetite for the food group had been wetted by a couple of heavyweight buyers who chased the shares higher for most of the day. CADBURY SCHWEPPES put a bit of fizz back into a tired market yesterday as talk of corporate action swirled around the chocolate and soft drinks group. You do not need to buy the extreme “the millennium bug will lead to a global recession” view to acknowledge that negotiating our way around it will be tricky. The millennium comes at an awkward time; pity we couldn’t put it back a year or two..

The world economy continued to grow through most of the 1970s, despite the surge in global inflation and despite two oil shocks.The outlook may be for a more difficult period in the first years of the next century, but it is hard to see anything more serious than, say, the early 1990s downturn, and maybe nothing as serious as that.The trouble is that even thoughtful and intelligent policy makers are finding it hard to accept that the present growth phase might ever end. And we won’t know it has happened until after it has happened.If that sounds rather bleak, remember that market economies are self- healing They can recover from bad economic policies. Add in the additional activity this year and the fall-back next and it is going to be very difficult to know how serious the ultimate impact on the economy will be.That is surely the greatest danger of all – that there will be policy errors which will be hard to rectify. From a micro, hands-on, point of view the most obvious danger is a physical catastrophe, such as an aircraft falling out of the sky.From a macro point of view the most obvious danger is a failure of global economic policy – the wrong response to what turns out to be wrong data. For three months either side of the millennium all economic and financial data is going to be distorted. Money supply is going to be hopelessly misleading, not just because the banks are stockpiling cash ready for customers who want to go liquid.