The first day of Royal Ascot curtailed trading, as some of the City's finest minds focused on horses rather than shares. The second liners were also quiet, with the FTSE 250 ending 9.8 better at 5,828.0 and the Small Cap finishing 2.8 higher at 2,612.2.Hanson, the building materials group, was the best-performing blue-chip, rising 22.5 to 606.5p. The relic of Lord Hanson's empire was excited by renewed talk of a merger with cement-maker Blue Circle, up 9.25 to a yearly peak of 447.5p. However, analysts cautioned about possible competition pitfalls.

A more likely reason for Hanson's jump was the expectation of a strong rise in sales at today's trading statement.Banks were thrown under the spotlight by two research notes. A Dresdner Kleinwort Benson 150-page doorstopper contained an earnings upgrade for Barclays, up 31p at 1851p, and Halifax, 1.5p higher at 817p. DKB's positive comments on the sector propelled Alliance & Leicester 27.5p higher to 894p. The rise came despite whispers that the terms of the merger between A&L and Bank of Ireland are to be tweaked in favour of the Irish outfit.Broker WestLB Panmure gave Northern Rock, up 3p to 500p, a big push with an upgrade from "hold" to "trading buy" Lloyds TSB, up 19p to 865.5p, was also favoured. Bank of Scotland made its own luck, rising 20p to 862p after reporting an "encouraging" start of 1999.Standard Chartered shed 17.5p to 1,086p after a large European broker worried about margins in Hong Kong slashed its profit predictions.Railtrack steamed 36p ahead to 1330p after being awarded contracts to run some London Underground lines. Aerospace engineer Smiths Industries flew 24p higher to 902p after its customer Airbus won several orders at the Paris Air Show. Rolls-Royce also powered 5.5p higher to 283.25p after clinching $843m-worth of business at the French air jamboree.Scottish Power firmed 11.5p to 570.5p after its shareholders duly approved its takeover of Pacificorp of the US.Bus group Stagecoach was punctured by profit-takers after the recent purchase of Coach USA and lost 7.75p to 218.5p.Cable & Wireless rang up a 23.5p fall to 800.5p after Morgan Stanley downgraded.

Securicor, figures tomorrow, shed 13.5p to 533 in sympathy.A Wal-Mart-inspired price war threatened Kingfisher, down 19.5p to 758.5p, Sainsbury's, 8p worse at 364p, and Boots, 12.5p lower at 773.5p. Discount clothes chain Matalan experienced a rare fall, losing 102.5p to 800p on the Wal-Mart threat, just like Morrison Supermaket, 5.5p lower at 159p.Among the midcappers, Manchester United rebounded 11p to 181.5p after Warburg promoted it to "strong buy", while Bowthorpe buzzed 30p higher to 517.5p after the pounds 288m buy of US telecom products group Netcom. Building materials group Hepworth jumped 11p to 202.5p on vague bid talk and HSBC "buy" advice. Takeover whispers sent paper groups DS Smith 5.5p higher at 147.5p and Arjo Wiggins 9p better at 219p. Cement-maker Rugby firmed 2.5p to 121.5p on revived bid talk.Biotechnology group Celltech fell 8.5p to 464p after offering around 288p per share to buy rival Chiroscience, up 21p at 280p.