Footsie in the red

Shares in London drifted into the red today despite enthusiasm over a potential £1 billion takeover battle in the housebuilding sector.

Worries over rising oil prices and a surprise blow to confidence among gambling stocks generated gloom in the City as the FTSE 100 Index dipped 6.6 points to 5701.

The fall came despite a positive start on Wall Street which saw the Dow Jones Industrial Average move almost 30 points higher by the close of trading in London.

The overall tone of the market was again dominated by record oil prices, which flirted near 78 US dollars a barrel as developments in the Middle East continued to dominate the thoughts of traders. The Footsie fell 3% last week as the crisis flared up.

Among the oil stocks, Royal Dutch Shell was up 2p to 1905p, but fellow major BP slid 3p to 640p.

One of the strongest performances in the top flight came from Persimmon as the only housebuilder in the FTSE 100 Index lifted 2% or 25p to 1213p on news of consolidation in its sector.

The deal involved the retirement housebuilder McCarthy & Stone, which agreed a takeover by a consortium featuring the private equity firm Permira.

But shares in second-tier McCarthy surged well beyond the £10 a share offer price as it emerged that West Coast Capital was considering a joint offer worth £10.30. McCarthy shares were 106p higher at 1048p.

Argos owner GUS was among the blue-chip risers as the weekend brought another round of speculation about a potential takeover by US-based private equity groups.

The stock rose 18.5p to 982.5p and was matched by a gain of 8p to 541p for BSkyB, as the satellite broadcaster prepared for the launch of its broadband service tomorrow.

But miners were among stocks putting the market under pressure, with Vedanta Resources falling 55p to 1278p and Xstrata 76p lower at 1986p.

Build Center and Plumb Center owner Wolseley also fell 25p to 1096p, as worries over a slowdown in the US housing market offset a largely positive trading statement that pointed to continued solid growth.

The uncertainty in the gaming sector came after smaller company BetOnSports said its chief executive David Carruthers had been detained at a US airport early this morning.

BetOnSports said it was still awaiting news, but analysts linked the arrest to ongoing concerns over the legality of internet and telephone gambling in the US.

PartyPoker operator PartyGaming was down 6p at 103p, while 888 Holdings was 7p lower at 193p and smaller rival Sportingbet fell 13%, or 42.25p at 282p. BetOnSports slumped 17% – 24.5p to 122.5p – although this represented an improvement on the 24% fall seen earlier in the session.

The day’s biggest blue chip risers were Kelda up 19p to 810p, Persimmon up 25p to 1213p, GUS 18.5p higher at 982.5p and Centrica up 5p to 275.25p.

The heaviest fallers were 3i down 153.5p to 863p, PartyGaming off 6p to 103p, Vedanta Resources 55p lower at 1278p and Xstrata which lost 76p to 1986p.