FTSE in lacklustre mood

The London market finished the week in lacklustre mood today after a fall for insurers Aviva and Prudential offset strong gains from Corus.

Aviva shares dipped 4% as the prospect of a major push into the United States drew a negative response from investors.

Corus moved the other way as rumours of a bid for the steel firm swept the City but it was not enough to bolster the wider market and the FTSE 100 Index sank 1.1 points to 5888.9.

The mood was not helped by a fall on Wall Street where the Dow Jones Industrial Average was almost 70 points down when trading in London closed.

But the recent rally in London has seen the Footsie recover more than half of the 626 points it lost between April and June when stock markets around the world were rocked by inflationary fears.

Shares in Aviva slipped 27.5p to 725p because of worries over the impact of a share placing that it said may be needed to part-fund a possible deal for AmerUs, which has a market value of more than £1 billion.

Prudential was also in retreat, down 16p to 585.5p as a deal for AmerUs made it less likely that the Norwich Union owner will revive interest in its UK counterpart following a failed merger attempt in March.

The weakness for the insurance pair was exceeded by a drop of 6.75p to 108p for PartyPoker owner PartyGaming – the session’s biggest faller.

Shares in former British Steel company Corus lifted more than 4% however as investors pinned their hopes on a takeover bid for the Anglo-Dutch firm.

Further consolidation in the steel sector is seen as likely following Mittal’s takeover of Arcelor and shares in Corus were up 19.25p to 451p today.

Miners were also in positive territory as the price of metals strengthened. Antofagasta was 12p higher at 437p while Xstrata put on 61p to 2024p.

Developments outside the top flight saw easyJet shares jump 9% – up 34p to 425p – after it said a strong June would lead to much higher annual profits.

Trading statements were also well received for paving company Marshalls, which lifted 8.25p to 314.25p, and Aga Foodservice – ahead 9.5p at 382.5p.

And EMI shares gained 12.75p to 313.75p after a newspaper report said Warner Music was contemplating an improved offer for the UK company.

But there was no such gain for estate agency group Countrywide, even though it said there had been a 29% rise in the number of sales in the hands of conveyancers. Shares initially rose 3% but closed 3.75p lower at 503.5p.

Southern Cross Healthcare, a care home group, saw its shares rise to 270p on the first day of trading after listing at 225p.

The day’s biggest blue chip risers were Corus up 19.25p to 451p, British Energy 22.5p higher at 717p, Xstrata up 61p to 2024p and British Airways which gained 10.75p to 359p.

The heaviest fallers were PartyGaming which fell 6.75p to 108p, Aviva off 27.5p to 725p, Prudential down 16p to 585.5p and Smith & Nephew off 19.5p at 931p.