Gilts

Gilt prices dived, driving yields up 15 basis points to 4.10 per cent, their highest since late March, and a 25 basis points rise in two days, partly on fears that the Government will issue gilts to finance its rumoured bailout of mortgage assets. Such a rescue also dims the chances of imminent rate cuts. The June long gilt future fell 89 ticks to 108.85.

Rumour of the day

Kopane Diamond Developments, flat at 10p, which expects drilling results from its Lesotho diamond pipe this year, has been mooted as a takeover target for Firestone Diamonds, up 3p to 156p. Firestone denied interest, but it is not averse to stake-building. It recently sold its stake in fellow Bostwana miner African Diamonds for £2.8 million.

Deal of the day

Patrick Garner, the Pinewood Shepperton finance director, helped to drive shares in the film studios down 3p to 245p by selling 11,700 shares at 245p each. He bought back 2,925 of them. Broker Investec raised its price target to 264p on the hope that Peel Holdings, which recently doubled its stake, would bid for the company.

Bet of the day

Traders are sceptical about recent rises in bank stocks and several were taking private bets that they would fall. BetsforTraders.com reports 17 to 1 of its market trader punters yesterday were betting on bank falls. It is offering odds of 2-1 that Royal Bank of Scotland, down 9p at 366p, will be below 365p in five market days.

Tiddler to watch

The trend for online credit card applications is benefiting Intelligent Environments, which provides the enabling software to Barclaycard and several building societies. The shares rose 0.625p to 7p putting it on a p/e ratio of 10 as it unveiled 118 per cent annual profit growth. Dawnay Day, the house broker, believes earnings will improve.

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