FTSE slips into red
The London market slipped into the red today as investors gave the cold shoulder to a £2.1bn (€3bn) acquisition by aerospace and defence group BAE Systems.
The FTSE 100 Index surrendered earlier modest gains to stand 8.8 points off at 5027.5 by mid-morning.
BAE headed the Footsie fallers after unveiling a $3.97bn (€3bn) deal to buy US rival United Defense Industries.
The company’s stock fell 7p to 243p after it said it was planning to part-fund the deal through a share placing worth around £375m (€544m).
Investors in the FTSE 250 Index-listed London Stock Exchange also contributed to the sombre mood by reacting coolly to news that Deutsche Boerse was calling off its £1.4bn (€2bn) takeover campaign. The stock moved to the top of the FTSE 250 Index fallers, losing nearly 9% or 45p to 494p.
A bumper session in New York on Friday had earlier lent support to the Footsie, with the Dow Jones Industrial Average lifting 107.5 points by the closing bell.
American shares had moved towards the 11000 threshold after economic data released in the US left traders anticipating a softer approach by the Federal Reserve to interest rate policy.
However, consumer credit data due out in the US later today could tip the balance back in favour of rate rises and put pressure on equities, analysts said.
Back in the City, Reuters was second in the top flight risers, more than 1% or 6.5p ahead at 423p, after Lehman Brothers upped its price target on the news and financial data group.
However, GlaxoSmithKline was more than 1%, or 18p, down at 1271p after going ex-dividend. News that the temporary halt in production of two drugs for the US market could affect the company’s 2005 earnings also failed to impress investors.
FTSE 250-listed Aggregate Industries also drifted 0.5p to 139.25p after revealing record profits, but admitting that weaker UK demand had offset positive conditions in the US.
