Footsie down despite Centrica surge

The London market suffered a sharp sell-off this afternoon in spite of bid speculation adding more than £1 billion to the value of British Gas owner Centrica.

The losses were triggered by Wall Street sliding heavily into the red on a mixture of poor earnings reports by US giants and fresh fears of higher interest rates.

With annual results from oil giant Royal Dutch Shell and drugs maker AstraZeneca disappointing investors on this side of the Atlantic, the FTSE 100 Index closed 54.3 points lower at 5747.3.

Royal Dutch Shell’s record haul of £12.9 billion was towards the lower end of market hopes and concerns about its inability to completely replace its reserves persisted, leaving shares down 2% or 49p to 1956p.

The slide in sentiment affected BP which declined 20.5p to 655p, although BG Group survived the sell-off to rise 10.5p to 647p.

Top of the Footsie fallers board was AstraZeneca, which was bullish about 2006 but saw its share price fall 96p to 2638p as it lost some of the gains seen in recent sessions.

It came as new boss David Brennan said the drugs giant must do more to bolster its product pipeline in the wake of a number of high-profile set-backs in clinical trials.

Powering to the top of the charts was Centrica after it was reported that Russian energy giant Gazprom was mulling a bid. Shares in the UK firm jumped 11% or 30p to 300p.

Fresh bid activity also surrounded bookmakers Ladbrokes after owner Hilton Group confirmed it had received more approaches for the business in recent weeks.

It was also reported that CVC Capital had seen a £3.7 billion offer rejected, fuelling hopes of a bumper payday for shareholders. Hilton rose 8.75p to 375.25p, while FTSE 250 rival William Hill lifted 10.5p to 589p.

Elsewhere in the gaming sector, online casino operator 888 Holdings fell 10.25p to 204.75p even though it made fresh inroads into the poker market and grew revenues by 52% over the past 12 months.

And retailer Thorntons slumped 5%, or 7.75p to 138p, after it revealed that it had ended takeover talks with executive chairman Christopher Burnett who had previously indicated a bid worth £124 million. The moves fell through after recent trading woes reduced that figure to £87.4 million.

Pubs chain Mitchells & Butlers was in the red after it reported a 4% lift in like-for-like sales over the past four months, but said it remained cautious on the outlook for consumer spending. Shares fell 8p to 398p.

Coffee house chain Caffe Nero moved in the opposite direction after reporting a sharp jump in profitability after its expansion plans continued at a steady pace. Shares lifted 0.5p to 251.75p.

The highest Footsie risers today were Centrica up 30p to 300p, Smiths Group rising 29p to 1029.5p, Carnival up 84p to 3194p and Hilton Group rising 8.75p to 375.25p.

The heaviest fallers were AstraZeneca down 96p to 2638p, BP off 20.5p to 655p, ICI down 9.5p to 357.5p and Royal Dutch Shell off 49p to 1956p.