Renewed merger and acquisition speculation proved insufficient to keep the FTSE 100 Index in positive territory today.
Shares in Smith & Nephew and Argos owner GUS were lifted by deal rumours, but the gains were more than offset by a tough session for miners as the Footsie slipped 36.3 points to 5618.9 by mid-morning.
Falling copper prices put pressure on a clutch of blue-chip stocks with BHP Billiton off 21p at 945p and Kazakhmys down 13.5p at 1014.5p.
The losses were exceeded by a drop of 2% for Vodafone as investors braced themselves for further boardroom battles at the mobile phone giant.
Amid reports that key shareholders will vote against the re-election of several directors at next month’s AGM, Vodafone shares were off 2.5p at 118p.
Takeover speculation propped up the market with medical devices maker Smith & Nephew up more than 1% – ahead 6p to 440p – as investors speculated over a move for the company, possibly from US firm Bristol-Myers Squibb.
Buy-out interest also lifted Argos owner GUS by 13p to 926p, as the market pondered a move by one of the big US private equity houses.
Elsewhere in the top flight, shares in Morrisons continued their recent strong run after reports that outgoing HBOS chief executive James Crosby could be appointed to the chairman’s post, in place of veteran Sir Ken Morrison. The supermarket retailer stood 1.5p higher at 201.75p.
Alliance & Leicester was also on the risers board after revealing a sharp improvement in its share of the mortgage market. Shares were 8p higher at 1172p, as investors drew encouragement from its latest trading statement.
Outside the top flight, shares in H Samuel jeweller Signet were up 5p to 101p, after confirming speculation at the weekend that it was talking to US rival Zale Corporation about a potential merger.