Footsie makes slow start to week

Hopes of a strong start to the week from London’s leading shares evaporated today as the FTSE 100 Index fell back from earlier gains.

After rising to within nine points of the psychologically important 4,000 barrier, the Footsie remained below its opening market at lunchtime, down 10.6 points at 3958.8.

Shares had been boosted in early trading by a better showing on Wall Street on Friday but as the morning wore on, traders were expecting the Dow Jones Industrial Average to open lower.

With little in the way of major corporate news to tempt investors to the market, retail companies proved to be the real eye catchers.

The interest was sparked by a rush of takeover speculation surrounding department stores Debenhams and Selfridges.

Debenhams overtook Selfridges at the top of the FTSE 250 risers board after news of an indicative offer from venture capital firm Permira prompting a 25% leap in its share price – rising 83.25p to 414p.

Meanwhile Selfridges also gathered momentum with a 12% gain as a second potential bidder entered the fray after news earlier today of an agreed £598 million offer from Canadian billionaire Galen Weston. Shares were up 43.75p at 399.25p.

Other stores groups benefiting from the interest were House of Fraser, which rose 1.5p to 92p, James Beattie gained 5p to 150p and high street favourite Marks & Spencer moved 3.25p higher to 299p.

Away from the retail scene, all of the high street banks reflected the indifferent mood in London.

Abbey National fell 9p to 478p, while Royal Bank of Scotland slid 5p to 1631p, HSBC was off 5.5p at 708.5p, Barclays lost 2.75p at 406.25p and HBOS shed 10p at 698p. Lloyds TSB was down 6.25p at 410.75p.

On the upside, transport operator Go-Ahead made good progress after it announced that its majority-owned subsidiary Govia had signed a new five-year deal to run the South Central rail franchise. Shares gained 22.5p to reach 690p.

Granada topped the Footsie fallers board with a 2.25p loss to 66p after Lehman Brothers reiterated its warning that the ITV giant’s proposed merger with Carlton Communications remains at risk.

And among the second tier fallers was restaurant group Pizza Express as investors had their first chance to react to Friday’s news that former chairman Luke Johnston would not be raising his bid which has now lapsed.

Shares slipped 2.5p to 386p.