FTSE in negative territory

Traders overcame a quiet session for corporate news by turning the spotlight on possible merger and acquisition activity today.

Industrial firms Tate & Lyle, ICI and Corus were among London’s biggest risers amid continued speculation that the trio could be targeted.

Corus and ICI both added 1% but the gains were not enough to prevent the FTSE 100 Index falling 11.9 points to 6198.4 at mid-morning.

Steel group Corus was 5.5p higher at 543p after a report in India said Tata Steel may up its offer to 600p a share in an effort to outbid CSN, which last month agreed a 515p a share offer worth £4.9b n (€7.5bn) with the Corus board.

Shares are now more than 170% higher than 18 months ago.

ICI was 3.25p stronger at 481.25p on continued bid speculation, while ING upped the chemicals company to buy from hold during yesterday’s session.

Vague bid talk also lifted Tate & Lyle by 13.5p to 734p, leaving the sugar and starch company at the top of the Footsie risers board.

The trio were joined on the way up by HSBC, which rose 13p to 932.5p after Morgan Stanley said shares in the banking giant had been oversold.

Other firms in the sector were viewed less favourably in comparison, which meant Royal Bank of Scotland fell 9p to 2016p and Lloyds TSB dipped 5p to 574.5p. Northern Rock rose 8p to 1163p, ahead of full-year results next week.

In a quiet session for corporate news, Trafficmaster moved in the right direction with a gain of 3.75p to 69.75p. Sentiment was boosted by an upbeat trading statement, including a promise of further growth in 2007.

And Wilson Bowden shares made fresh gains, up 9p to 2276p, as speculation emerged that a consortium led by Tom Hunter was in a strong position in the £2bn (€3.1bn) auction of the housebuilder.