Footsie slides in early trading

Investors in Yell voiced their disappointment today with a £2.3 billion deal for a leading publisher of directories in Spain.

Investors in Yell voiced their disappointment today with a £2.3 billion deal for a leading publisher of directories in Spain.

The owner of the Yellow Pages said it would need to issue new shares to raise £350 million towards the cost of acquiring TPI from Telefonica, sending its shares 3% or 14p lower to 515.5p.

It set the tone for a difficult session for the FTSE 100 Index which had retreated 21.9 points to 6038.1 by mid-morning, with oil stocks also under pressure after the cost of crude retreated below 71 US dollars a barrel overnight.

Royal Dutch Shell weakened 27p to 1966p, BP fell 5.5p to 678p and BG Group faded 16p to 745p as investors took the view that the surprise hike in interest rates in China yesterday could lead to the world’s second largest consumer of oil importing less.

Friends Provident survived the sell-off after becoming the fourth insurer to beat expectations for sales during the first quarter of this year.

Total UK new business of £856 million was 23% better than last year and ahead of the £800 million predicted by analysts, catapulting Friends on to the Footsie risers board with a 1.25p gain to 197.5p.

But a week of positive results by insurers ended with profit-taking elsewhere in the sector as Aviva weakened 1.5p to 800p, Prudential dipped 3.5p to 645p. Legal & General was also down early on but recovered to stand unchanged at 139.75p.

Pharmaceuticals giant GlaxoSmithKline was towards the top of the risers board for the second consecutive session as investors liked the look of its prospects after first-quarter profits rose to £2.2 billion at constant exchange rates.

Glaxo shares lifted 30p to 1562p, but rival AstraZeneca could not repeat its strong performance of the previous session when it upped its full-year earnings targets. Astra eased 29p to 3026p.

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