The Innovation Group crept higher after the insurance software maker hosted a series of City meetings, bolstering hopes it will secure a long-awaited licence agreement with IBM inside the next few months.

Shares rose ¾p to 34¼p as ABN Amro repeated “buy” advice, saying that progress with IBM should allow it to match earnings forecasts, and Altium Securities raised its target price to 40p in anticipation of a deal.

News of sector consolidation lifted Offshore Hydrocarbon Mapping, an oilfield surveyor that was spun out of Southampton University. It rose 9½p to 203½p after METM, a privately owned competitor spun out of Edinburgh University, was bought by Norway’s Petroleum Geo-Services for $275 million (£140 million).

Thus Group faded 11½p to 185½p as United Utilities sold its 22.6 per cent stake. Some reckoned that this made the group a more likely takeover target, with Goldman Sachs moving to a “buy” stance as it saw the share overhang and potential blocking stake removed. But Cazenove’s team highlighted that United had placed the shares rather than selling to a trade buyer, suggesting that there was nothing on the horizon.

The education outsourcing agency Carter & Carter slid 72p to 918p, a seven-month low, after its business development director quit. Peter Marples was considered the most likely successor to the chief executive, Phillip Carter, who was killed in a helicopter crash last month.

Oxonica ended the day’s top performer, squeezed higher by 15p to 51½p on thin volumes. The fuel additives maker had tumbled as much as 73 per cent this month after a trial contract collapsed. The group is likely to reveal plans for a fundraising next week and is said to be investigating potential alternatives to a rights issue, including partnership deals.

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