FTSE closes on negative note

Progress by a string of utilities was not enough to cheer the rest of the London market today.

The FTSE 100 Index started the week on a negative note despite the prospect of further takeover activity in the utility sector boosting the likes of National Grid and Severn Trent.

Falls by oil heavyweights BP and Royal Dutch Shell contributed to the negative mood, leaving the Footsie 15.9 points lower at 5501.5.

BP lost 9.5p to 630.5p, while Shell weakened 18p to 1868p, despite the cost of a barrel of crude oil rising above the 60 US dollars mark in New York. The pair make up around a fifth of the Footsie.

Others on the way down included online poker giant PartyGaming as it lost some of the gains notched up in a strong run last week. The stock was the heaviest blue-chip faller, losing 3.25p to 135.5p.

In contrast, utilities were in good shape after weekend reports suggested a Swedish firm was casting its eye over the sector.

National Grid was the biggest beneficiary after the Financial Times said Vattenfall had appointed advisers to carry out a broad strategic review on the UK energy market.

The stock cheered 7.5p to 552p and was joined on the way up by Severn Trent, up 14p to 1059p, and water group Kelda, rising 9.5p to 742.5p. Other climbers in the sector included Scottish & Southern Energy, which gained 11p to 993p and United Utilities rising 6.5p to 671.5p.

There were contrasting fortunes for retailers Marks & Spencer and Next today after a broker issued a note on both firms.

M&S was the third highest Footsie riser after broker Morgan Stanley upgraded the stock from “equalweight” to “overweight”. Shares in the high street giant were ahead 6.5p at 485.5p – way above its 343p level of just three months ago.

But there was not such good news for rival Next, which Morgan Stanley downgraded. Shares in the retailer fell 20p to 1510p.

Banking group Lloyds TSB fell slightly after warning it had seen a higher percentage of bad debt in the UK. The stock ended the session 1.25p lower at 481.5p.

Elsewhere, news that construction group Balfour Beatty was considering an offer to rival Carillion’s £290 million bid for Mowlem also sparked interest.

Shares in Mowlem were up 5.5p to 215p but Carillion fell 7.5p to 293p and Balfour Beatty slipped 7.75p to 341.5p.

Yesterday’s explosion at the Buncefield oil depot near Hemel Hempstead seriously damaged the head office of Northgate Information Solutions, sending shares 5% lower at one point. It later recovered to stand down 0.75p at 83p.

Online retailer ASOS suspended its shares at 77.5p after its new warehouse was damaged because of the blaze. ASOS closed down its website and cancelled outstanding orders during what is normally the busiest time of year.

The highest Footsie risers today were Alliance UniChem, up 13.5p at 768.5p, ITV rising 1.5p to 110p, National Grid up 7.5p to 552p and Marks & Spencer rising 6.5p to 485.5p.

The heaviest fallers were PartyGaming off 3.25p to 135.5p, Old Mutual down 2.5p to 157.5p, BP off 9.5p to 630.5p and BAE Systems down 5p to 337.25p.