News of the loss of 16 key staff to a rival left Amvescap nursing the main market’s sharpest fall. Four investment managers at the Anglo-Ameri-can asset manager’s fixed-in-come team, including Stephen Johnson, head of the division, joined Deutsche Bank’s asset management division this week. Twelve of its senior staff also made the switch.

The managers were said to be overseeing about 20 per cent of Amvescap’s $465 billion (£236 billion) in assets.

Shares in Amvescap dropped 30p to 565p amid fears that it may now lose institutional clients. The company said that it plans to sue Deutsche Bank over the affair.

In the wider market, the FTSE 100 index closed down 25.4 points at 6,267.2 after Ben Bernanke, Chairman of the Federal Reserve, said that uncertainty over the outlook for the US economy had increased. Banks, insurers and financials weighed the heaviest, with HBOS down 18p to £10.46 and Old Mutual off 5.3p at 160.6p.

Energy stocks protected the UK benchmarks from deeper falls as the stand-off over Iran pushed oil prices higher. BP was the top performer, up 8½p to 552p, and BG Group added 7½p to 731p, while Shell was up 14p to £16.94 despite a bearish piece of research from SG Securities. Shell’s low production growth targets, its increasing reliance on Nigeria and its pursuit of unconventional investments “implies the company may not generate enough cashflow from 2009 to cover both its investments in future growth and its current dividend policy”, SG told clients in a note repeating “sell” advice.

Hammerson closed 31p lower at £17.09 despite renewed speculation about a bid from Unibail, its French peer. Analysts at Merrill Lynch highlighted that Unibail raised €460 million (£312 million) cash this week by selling its 50 per cent stake in the Coeur Défense skyscraper in Paris, Europe’s largest single office block. With the company’s debt-equity ratio falling to around 31 per cent, Merrill’s team pondered what it was intending to do with its money.

Bid speculation helped Next to the top of the FTSE 100 risers, up 51p to £25.53, after Ri-chard Ratner, analyst at Sey-mour Pierce, said shares could be worth up to £29 to an acquirer. That was despite many in the City doubting that any of the private equity funds said to have been looking at the retailer had formed a proposal.

Tate & Lyle ran back 3p to 544½p on concern that today’s trading update from the sugar refiner may disappoint. Nevertheless, some believe the company be close to agreeing the sale of its starch division.

Vodafone drifted 0.5p at 140.2p ahead of tomorrow’s investor briefing on its UK and German divisions. “It will be interesting to see if management can pull a rabbit from the hat in two of the toughest markets,” said Deutsche Bank.

Mitchells & Butlers one of the main speculative features in the mid-caps, with shares rallying late in the day to finish up 16p at 784½p. Stronger-than-normal volume on the derivatives markets sparked theories of possible bid interest.

Some traders reckoned that Robert Tchenguiz, its 15 per cent shareholder, could revive his interest after failing to land La Tasca, the tapas restaurant chain that yesterday agreed to a £96 million offer from the private equity group Tragus. The property investor previously has threatened to make a hostile bid for M&B if the pubs group did not shift its property into a real estate investment trust, a decision that M&B said it will not be making before May.

The House of Lords’ surprise rejection of the Government’s plans to allow new casinos provided another blow to Rank Group, which closed down 3¼p at 205¾p. It had been expected to bid for several of the 16 casino licences on offer, but now faces a delay as the Government looks again at the decision making process.

— New York: Stocks slid after Ben Bernanke chided investors who may have looked past long-standing concerns about inflation after comments last week from the central bank. The close the Dow Jones industrial average closed 96.90 lower at 12,300.40.

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