Hopes remain that Pru will be gobbled up

Dealers continued to hope that Prudential could be a takeover target, despite two rumoured bidders pursuing other interests.

AXA, which has for months been thought to be watching Prudential carefully, last week confirmed it was taking over Winterthur, Credit Suisse's insurance subsidiary.

Meanwhile, another suggested predator, Dutch insurer Aegon, said on Monday it had signed an agreement to acquire a 49% stake in Mexican life insurer Seguros Argos.

Despite the announcements, Prudential edged up this week to around 560p on hopes that it could still be gobbled up, possibly by Italy's Generali.

Hopes of consolidation also spread to the brokers, with Jardine Lloyd Thompson in focus last week.

One day it climbed 20% to 416p on speculation that a tie-up with Heath Lambert or Benfield could be on the cards.

However, JLT, which is now trading at around 355p, said it was "not aware of any reason" for this share price move.

Meanwhile, Seymour Pierce published a bullish note on the Lloyd's insurers, giving the sector an overweight rating.

It said: "While we would regard further significant slides in the value of the US dollar to be problematic, we believe that recent underperformance by the stocks represents an excellent buying opportunity."

Its top picks in the sector are Amlin and Hiscox. IT

' Yvette Essen is stock market reporter for The Daily Telegraph