Corus news fails to reinforce FTSE

The London market continued to hover below the 6000 barrier today despite merger speculation driving shares in steel-maker Corus higher.

Early losses at B&Q-owner Kingfisher following disappointing results were overturned after analysts said a revaluation of the property portfolio to £3bn (€4.3bn) could renew interest from private equity firms.

However, a bad performance by the mining sector meant the Footsie index dropped 17.1 points to 5974.6 by mid morning.

A report that Corus had held merger talks with Russian steel maker Evraz excited traders and catapulted its shares 6% or 5p higher to 89p.

Analysts believe Corus must react by finding a partner after Mittal Steel launched a £12.9bn (€18.6bn) hostile bid for European rival Arcelor to create a steel giant whose output is three times as large as its closest competitor.

Kingfisher was supported by its property revaluation, up 3p to 246p, despite annual profits falling by a third to £445.7m (€641.6m).

Its chief executive conceded that the home improvement market in the UK had continued to weaken since the end of January, while analysts say there is no quick fix for poor performance at B&Q

Concerns over the strength of the US housing market dogged building materials supplier Wolseley which fell 9p to 1444, even though the owner of the Build Center chain posted a 20.9% rise in interim profits to £359.8m (€518m) and said it was confident of making progress over the full year.

Meanwhile, the mining sector was under pressure after a host of stocks went ex-dividend, meaning that shareholders are no longer entitled to the latest payout.

This affected BHP Billiton, which saw a 13p drop to 963p, Rio Tinto, which fell 34p to 2706 and Anglo American, whose shares were down 24p to 2039p.