SPECULATION that JP Morgan is interested in acquiring a 13 per cent stake in Standard Chartered helped the Far East bank up to its best level since this month’s $3.3 billion (£1.7 billion) purchase of Korea First Bank.

Shares in Standard have slipped since it unveiled the purchase of Korea’s seventh-largest bank, which it accompanied with a £1 billion share placing, with some analysts worried that it may have overpaid.

But it was the latest bout of conjecture over the fate of the 13 per cent stake held by the estate of Tan Sri Khoo Teck Puat that drove yesterday’s recovery. Mr Khoo, a Singapore financier, died last February leaving the banking world second-guessing what would happen to his family’s 160 million shares, the first of which were acquired in 1986 to fend off a takeover by Lloyds TSB. Given the scale of that holding, any buyer is expected to use the block as a platform to launch a bid for the bank as a whole This meant that yesterday’s suggestion that JP Morgan sounded out the family on a sale sent Standard up 20p at 955½p. The US bank drew back from lending to Asia after suffering losses in the wake of the region’s 1997 currency crisis and has recently focused on expanding at home. However, analysts think it is looking overseas once more.

The FTSE 100 firmed 6.1 at 4,853.4, less than a point short of its 30-month high, helped by an upbeat outlook from AstraZeneca, 78p dearer at £19.80.

National Grid Transco put on 8¾p at 512½p as Credit Suisse First Boston raised its price target to 550p and the Government approved the disposal of four of its eight gas distribution networks. 3i Group, up 9p at 673½p, was helped by Morgan Stanley, which predicted upward revisions to consensus forecasts, and Dresdner Kleinwort Wasserstein, which raised its target from 675p to 800p.

BSkyB, in which News Corporation, parent company of The Times, has a 35.3 per cent stake, improved 5p at 561½p as Citigroup raised its price target from 562p to 625p ahead of first-half results from the satellite broadcaster on February 2. The US broker has increased its subscriber forecasts and believes the resumption of share buybacks after the figures should help the stock.

Next, off 16p at £16.01, and Marks & Spencer, 4p dearer at 359¼p, traded in opposite directions as UBS predicted that the former will face slowing growth in the second half against an increasingly difficult market and tougher comparatives. On M&S, the Swiss broker has raised its target from 360p to 390p, citing hopes of a fresh bid. United Utilities gave up 13½p at 628½p as Deutsche bank moved from buy to hold on valuation grounds.

• NEW YORK: Disappointing company earnings news left the Dow Jones industrial average down 33.00 points at 10,465.60 at midday.

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