Footsie makes shaky start to week

London shares ended today in the red after a rise on Wall Street failed to offset the impact of gloomy UK economic and media sector news.

Although it recovered from a 23 point intra-day low, the FTSE 100 Index finished the session 8.6 points down at 4910.3.

US stocks rose after utility group Duke Energy Corporation agreed to purchase another utility owner, Cinergy Corporation.

The Dow Jones Industrial Average responded favourably, moving 19 points ahead to 10364 shortly after London’s close.

However, the weakest monthly manufacturing output figures in almost three years added to the gloom in the UK.

The Bank of England’s decision to keep interest rates on hold at 4.75% had been expected and had little impact on the market.

But media stocks were under pressure as a gloomy assessment of the advertising market from merger partners Capital Radio and GWR dragged the sector lower.

Newly merged radio company GCap Media fell 7%, or 24.5p to 310p, after reporting a 17% fall in revenues for April. The FTSE 250 Index group completed its long-awaited tie-up at the start of trading today.

Among individual stocks, radio and magazines group Emap drooped almost 2%, down 13p to 775p, while Daily Mail & General Trust hit the top of the Footsie fallers with a 14.5p loss to 668.5p. ITV slipped 1.25p to 117.25p and Financial Times owner Pearson fell 6.5p to 647.5p.

Financial stocks were in focus after Barclays confirmed that it would pay £2.9 billion for a 60% stake in the leading retail lender in South Africa.

Shares in Barclays recovered from an earlier loss to stand 2.5p up at 554p, despite the bank’s return to the country after an 18-year absence.

Among its major UK rivals, HSBC was in positive territory – up 1.5p at 859.5p - after announcing it was spending around £550 million for a 10% stake in Chinese insurance company Ping An.

Sliding into the red were Lloyds TSB, down 2p at 467.5p, and HBOS off 6p at 798p.

Shares in British Gas owner Centrica held firm despite warning that prices may have to rise again and it had lost 382,000 energy accounts since the start of the year. The stock recovered early losses to rise 4p to 221.5p.

Elsewhere, budget airline easyJet lifted 3% or 7.25p to 239.25p after it revealed it had carried 25.2% more passengers in April compared with a year ago.

LA Fitness bounced 11% or 22p to 215.5p as investors seized the opportunity to trade in its shares for the first time since a £90.3 million takeover offer was unveiled on Friday evening.

Takeover activity was also taking place in the radio sector where the Wireless Group added 2p to 90p after agreeing to be bought by broadcaster Ulster TV for £98.2 million. UTV was unchanged at 493.5p.

Biggest risers were Kingfisher up 13.75p to 266.5p, Centrica lifting 4p to 221.5p, Unilever gaining 9.5p to 538.5p and Boots advancing 10p to 594.5p.

Largest fallers were DMGT down 14.5p to 668.5p, GUS off 17.5p to 838p, Capita losing 7p to 377.75p and Reuters shedding 6.75p to 384.25p.