The London market suffered losses of near to 1% today after a poor finish on Wall Street took its toll.
The FTSE 100 Index was down 38.9 points at 6485.2 by mid-morning following market slides in the US, prompted by data revealing a widening trade deficit and renewed concerns over America’s cooling economy.
London’s benchmark index sunk into the red despite further rounds of takeover talk circling power companies, alongside miner Rio Tinto and directories firm Yell Group.
Rio Tinto led the leaders’ board, ahead 5%, or 180p, at 3719p as takeover speculation heated up, with BHP Billiton again mentioned as a possible bidder.
Yell shares also benefited from rumours that Google was interested in buying the directories business.
The stock fell heavily last month after a profits warning, but rallied yesterday and was up another 8p at 505.5p in early trading today.
Power companies were on the front foot after speculation linked French utility EDF Energy to a possible takeover move for Npower owner RWE.
While EDF denied it had been in contact with German authorities about an approach to RWE, the reports caused the likes of Scottish & Southern Energy, International Power and Centrica to rise on consolidation hopes.
International Power lifted 6.5p to 450p, Scottish & Southern gained 17p to 1503p.
Meanwhile, takeover speculation surrounding Friends Provident faded after strong gains yesterday. The life assurer was 2.25p lower at 207.75p, a decline which also reflected a weak session among financial firms.
Elsewhere, Hammerson was down 20p at 1653p after reports that the chief executive has said he is not putting the company up for sale.
In the FTSE 250, software group Autonomy Corp led the list of share fallers after saying it would place another 9.5 million shares. Shares were off 21.5p at 748.5p.