FTSE loses morning gains
The London market suffered a sharp reversal of fortunes today to lose hold of lunchtime gains and close deeply in the red.
After standing more than 13 points up with just a few hours of trading remaining, investors took fright at a poor start on Wall Street to bank profits on many blue-chip stocks.
Miners and oil stocks fell victim to the sell-off as the FTSE 100 Index finished the session 27.6 points lower at 5228.1. It capped a disappointing week for the index which started above the important 5300 threshold.
Fading bid talk meant banking group Lloyds TSB failed to escape the sell-off, although a positive broker note on leisure firm Hilton kept it among the highest blue-chip climbers.
Lloyds TSB eased 0.75p to 457.5p as investors lost interest in rumours that US bank Wells Fargo was keen on the group.
Most eyes were on oil prices as Hurricane Katrina battered the Florida coastline, with the cost of a barrel of crude remaining above 67 US dollars.
Oil heavyweights BP and Royal Dutch Shell could not benefit further from the high oil price, however, falling 8p and 2p to 610p and 1824p respectively.
Pest control group Rentokil Initial was again in the doldrums after it emerged Sir Gerry Robinson’s buy-out vehicle Raphoe Management had told the company it was not yet ready to put forward a takeover proposal. Rentokil was the heaviest Footsie faller, down 3.75p to 158.5p, as broker Dresdner also lowered its earnings forecast following half-year results yesterday.
On the corporate front, advertising giant WPP failed to cheer investors by revealing that it had claimed a greater share of its market and that profits for the first six months of the year rose 32%.
Shares weakened 11.5p to 580p as the company also complained of limited pricing power in its markets.
Miners struggled to find buyers and completed a disappointing end to the week, with Rio Tinto falling 16p to 1945p and BHP Billiton losing 6.5p at 809.5p.
But leisure group Hilton was boosted by an upbeat broker note. Shares rose 2% or 6p to 310p after Smith Barney reiterated its “buy” stance following the firm’s interim results yesterday.
A positive session generally for insurers also limited losses by the Footsie, with Legal & General one of the biggest climbers, up 0.75p at 109.5p. It was followed on the way up by Friends Provident, cheering 1p to 171.5p and Prudential up 0.5p to 503.5p.
Outside the top flight, investors in air filtration group Domnick Hunter were buoyed by the prospect of a bid battle. Shares lifted 42.75p to 716p after Eaton Group tabled a 675p rival offer valuing the company at £242 million.
The highest Footsie risers today were Hilton lifting 6p to 310p, Schroders NV up 7.5p to 794.5p, Hammerson rising 8p to 879p and William Hill up 5p to 571p.
The heaviest fallers were Rentokil Initial off 3.75p to 158.5p, WPP Group down 11.5p to 580p, Tesco off 4.75p to 326.75p and Vodafone down 2p to 149.25p.
