As the dust settled over SABMiller’s sudden withdrawal from bidding for Scottish & Newcastle, there was growing talk yesterday that Anheuser-Busch, the giant US brewer of Budweiser, was plotting to enter the fray.

S&N shares dropped 20½p to 787p, back below Carlsberg and Heineken’s joint 800p offer price. Any suitor has until the extraordinary meeting at the end of March to come up with a formal offer and it would not have to be as high as 850p.

Although most of the irrevocable acceptances that Carlsberg and Heineken have garnered hold good until a rival bid of 850p, they lapse if S&N’s board removes its recommendation, so AB could come in at 820p and secure its own recommendation.

The FTSE 100 rose 38.6 to 5,932.2, buoyed by better than expected high street spending figures and rallying banks, insurers and mining stocks.

The retail figures helped J Sainsbury to rise 7¾p to 373p, even though the Sainsbury family disclosed that it had sold a 1 per cent stake, or 19.4 million shares, taking the holding managed by the lawyer Judith Portrait down to 4 per cent.

HBOS was up 12½p at 659p. There was a rumour that the bank was looking to sell its 60 per cent stake in St James’s Place Capital, worth about £740 million, and use the cash to help to fund the purchase of a stricken mortgage lender with a useful current account customer base such as Alliance & Leicester. But analysts believe this is unlikely because St James’s, up 9¾p at 269½p, is the jewel in the HBOS crown. A&L, meanwhile, shed another 12½p to 479½p as a raft of analysts cut forecasts after its gloomy outlook statement on Wednesday. Michael Helsby, of Morgan Stanley, predicted that the 2009 dividend would be halved, saying: “To quote the finance director in the conference call, any slippage in profits from here makes the dividend very difficult.”

Barclays also went against the trend, down 7p at 483p, after Sandy Chen, of Panmure Gordon, said that he had not been convinced by the management’s confidence with Tuesday’s results and predicted it would have to write off at least another £2.3 billion from its assets exposed to bond insurers and the US mortgage market.

Xstrata rose 113p to a record high of £40.60 on continuing talk that Vale, of Brazil, has raised its offer from £40 to £47 a share, although Vale sources suggested that no bid agreement was imminent. Meanwhile, record high prices of gold and platinum helped to lift Anglo American 96p to £32.57, while climbing copper prices sent Kazakhmys up 34p to £15.22.

BP went against a rising oil sector, down 6½p to 551½p, after Citigroup cut its rating to “sell”, ahead of its strategy day next week, saying that the oil giant may have left it too late to invest in finding new reserves while the oil price was rising.

Centrica, owner of British Gas, fell 12¾p to 314p as its caution over rising wholesale gas prices combined with worry about Ofgem starting an inquiry into UK gas and electricity supplies.

— New York: Bleak readings on the US economy heightened fears of a recession. Investors were disappointed when the Philadelphia Federal Reserve reported that regional manufacturing fell by more than predicted. The Dow Jones industrial average closed down 143.00 points at 12,284.30.

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