QINETIQ gained 3 per cent on hopes that the defence research specialist is close to securing a £10 billion Ministry of Defence contract, a move that could propel its shares back through February’s 200p issue price for the first time in five months.

The £1.2 billion company, which last week appointed George Tenet, the former CIA director, as a non-executive, has proved a disappointment to both retail and institutional shareholders, which had clamoured to buy into its much-hyped £616 million fundraising.

But the shares moved decisively towards 200p yesterday amid suggestions that Metrix, the consortium comprising the former Government agency and Land Securities, has edged ahead of BAE Systems in the race for the Defence Training Rationalisation programme, a PFI contract to train Britain’s Armed Forces for the next 25 years. The contract is in two packages and Metrix is bidding for both. Numis Securities suggests that success is worth 25p a share to Qinetiq, or half that if one package is won.

QinetiQ rose 5½p at 188p, with VT Group and Carillion, both members of BAE’s rival MC3 consortium, off 6¼p at 476¾p and 1¼p cheaper at 381¼p respectively. Babcock International, which is bidding against Metrix for one package through the Holdfast consortium, dipped 2p at 366p. The FTSE 250 fell 46.7 at 10,308.6.

Big Yellow Group added 11½p at 548p, helped by an early-session institutional buy order and a substantial upgrade in the net asset value of rival Lok ‘n Store, off 3¾p at 190½p, from 106p to 213p. Evolution Group, up ¼p at 127¾p, was caught in a two-way pull, with a downgrade from “neutral” to “underperform” from Credit Suisse offset by the resumption of its share buyback programme under which it has purchased a further 2.65 million. A debut 145p target from Collins Stewart sent Computer Software Group up 3p at 118½p. Universal Salvage gained 2p at 152p on a contract win from Liverpool Victoria.

Proteome Sciences firmed 3½p at 63p on the publication of research in Brain showing that proteins found in the blood, detected through the use of Proteome’s plasma biomarkers, can indicate an increased risk of Alzheimer’s disease.

Pinnacle Staffing, the recruitment spin-off from Nestor Healthcare, held steady at 9¾p, despite the sale of 10.3 million shares, or 12 per cent, at 9¼p by an institution.

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