Slight fall for FTSE

FT publisher Pearson today slid from last week's four-and-a-half-year shares high, despite confirming the business was in line for record profits for the year.

FT publisher Pearson today slid from last week's four-and-a-half-year shares high, despite confirming the business was in line for record profits for the year.

The group led the day's losers, shedding 24p, or 3%, to 817.5p, losing much of the ground it made last week amid rumours of an imminent bid from US private equity group KKR for the Penguin and the Financial Times groups.

The London market overall saw a poor start to the week, with the FTSE 100 closing 18.8 points down at 6218.4, not helped by a faltering start on Wall Street.

Venture capital group 3i saw its shares hit a 52-week high in the day after broker Dresdner Kleinwort increased its price target for the group, saying its full year results could match last year's capital gains of £576m (€879m) from the £2.2bn (€3.35bn) portfolio.

Shares in the private equity group jumped 30p or 3% to 1075p earlier in the day before dropping back slightly to finish at 1067p.

The day's early star of the Footsie, InterContinental Hotels, set new shares records as it emerged the billionaire Barclay brothers had taken a 5% stake in the group, fuelling speculation that its owner Crowne Plaza could be in line for a £5bn (€7.6bn) takeover offer.

But the group failed to maintain its lead, ending the day just 8p up to 1308p.

Other risers of the day include Capita Group, which rose 10p, or 2%, to 647.5p and power station firm Drax Group, up 2%, or 11p to 739p.

On the downside, shares in Enterprise Inns took a tumble, down 13.5p to 653.5p after Merrill Lynch downgraded the pub group from 'buy' to 'neutral', citing valuation and a lack of catalysts for results for the first half of the year.

Merrill Lynch lowered its value target to 675p from 693p previously, adding that in terms of valuation, any restructuring of the balance sheet is now not likely to happen until as late as the first half of 2008.

Big faller British Airways took a hit amid fears in the City that planned strike action by cabin crew staff could end up costing the firm more than £100m (€152.6m), closing 2% lower, down 8.5p to 536p, as analysts calculated that each day of strike action be worth up to £15m (€22.9m) in lost business.

Outside the top flight, shares in gaming companies weakened on the decision of the US Department of Justice to subpoena a number of banks for its investigation into online gambling in the US.

While the details of the move remained unclear, analysts said it highlighted the risks of being in the sector. PartyGaming fell 3p to 27.8p, a drop of 10%. Sportingbet was down 9%, or 3.25p to 34p, while 888 Holdings was off 4p to 116p.

The biggest Footsie risers were 3i Group up 22p to 1067p, followed by Capita Group up 10p to 647.5p, Slough Estates, which rose 11.5p to 772p, and Drax Group up 11p to 739p.

Meanwhile the biggest losers were Pearson, off 24p at 817.5p, Enterprise Inns down 13.5p to 653.5p, BAE Systems, which fell 8.5p to 421p and Smiths Group, down 20.5p to 1072.5p.

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