FTSE in the red

A dramatic morning of takeover developments sent a buzz around the City today, although it was not enough to stop the market sliding into the red.

Interest in ITV, the London Stock Exchange and Corus dominated market talk as the FTSE 100 Index drifted 27 points lower to 6165 by mid-morning.

ITV was the session’s biggest faller as concerns over its takeover added to a heavy sell-off in Asian shares with the Nikkei closing down more than 2%.

ITV fell 1.75p to 114p after BSkyB bought 17.9% of its shares in a move seen as a potential blow to a takeover by NTL.

Sir Richard Branson, NTL’s largest shareholder, has called on the Office of Fair Trading to intervene and force BSkyB to sell its stake. Shares in BSkyB were also in retreat, down 7.5p to 529.5p.

Developments at Corus were more favourably received by the market and its shares continued to gain strength as analysts speculated on the entry of Severstal into a bid saga already involving Tata and Brazil’s CSN. Corus shares lifted 2.5p to 498p.

And in the second tier, London Stock Exchange jumped 6% – or 71p to 1289p - after New York’s Nasdaq exchange tabled a formal takeover offer.

Nasdaq already owns 28.75% of LSE following a share purchase today and is now waiting for a response from the LSE.

Analysts suggested that the 1243p-a-share bid, which valued LSE at £2.7 billion, may not be enough to tempt a board well used to fending off takeover approaches.

Meanwhile, a profits warning from logistics group Christian Salvesen caused its shares to drop 7.25p to 68p, or 7%.

And back in the top flight a string of financial stocks dipped into the red with Lloyds TSB down 7p to 561p and HSBC down 8p to 983p.