Poor afternoon for FTSE

London shares saw a sharp downturn during afternoon trading after lower-than-expected US retail sales figures led to a tumble in the US markets at the start of the day’s trade.

The FTSE 100 Index closed down 72.1 points at 6161.2 with only a handful of stocks managing to keep hold of gains from earlier in the session.

Cadbury Schweppes was the outright winner of the day, with a gain of more than 10%, or 57p to 602p, after news that former Snapple owner and US financier Nelson Peltz had built up a 2.98% stake in the group.

The move fuelled takeover speculation and prospects of change within the group.

Meanwhile, brewer SABMiller led the blue-chip fallers with a loss of more than 4%, or 50p to 1085p, after it announced that Dutch brewer Heineken had pulled the company’s licence to manufacture and distribute Amstel Lager in South Africa.

Alliance Boots was another stock to close in the black as it continued recent gains with investors betting on the possibility of a higher offer for the pharmacy giant. Shares were up 21p at 1017.5p.

The news was still impacting shares at Sainsbury, which fell 11.5p to 521p.

Chemicals group ICI lost some of its earlier boost after broker Collins Stewart said there was a 50/50 chance of a bid emerging from Dutch rival Akzo Nobel to close down 1.75p at 487.75p.

Continued concerns regarding mortgage loan repayments in the US impacted financial stocks with fund managers Man Group down 19p to 513.25p and Amvescap 16.5p lower at 586.5p. Meanwhile, banking group Barclays was off 21.5p at 706p and Royal Bank of Scotland lost 44p to 2048p.

News that Royal Dutch Shell was eyeing a move to invest in Iraq’s oil fields failed to impress investors as the stock ended 10p lower at 1657p.

In the second tier, HMV plunged nearly 16% after its strategic review disappointed traders. The company said sales had continued to decline in the new year at both its HMV music stores and its Waterstone’s branches as it announced plans to cut costs of £40m (€58.5m) a year by 2010.

The stock was 24.25p lower at 128.5p.

Among the risers, insulation specialist SIG was ahead 9p at 1163p on bid rumours and positive sentiment over the stock after Chancellor Gordon Brown outlined plans to insulate eight million homes.

Engineering firm John Wood Group lifted 10p to 296.5p after a series of broker upgrades following its full year results last week and a recent pick up in both the gas turbine industry and the oil services sector – both areas in which the company has a strong footing.

Elsewhere, estate agency group Countrywide slipped 0.5p to 594.5p despite posting full year results slightly ahead of expectations and news it was set for a good performance in the year ahead.

The biggest Footsie risers were Cadbury Schweppes ahead 57p at 602p, Alliance Boots up 21p at 1017.5p, 3i Group ahead 3p at 1137p and Home Retail Group up 0.5p at 422p.

The biggest fallers were SABMiller down 50p at 1085p, Wolseley off 51p at 1244p, Man Group down 19p at 513.25p and Barclays off 21.5p at 706p.