Mergers fail to boost FTSE

Merger and acquisition activity failed to support the London market today as US sub-prime mortgage concerns again hit global markets.

Merger and acquisition activity failed to support the London market today as US sub-prime mortgage concerns again hit global markets.

Sainsbury’s rose after it received its second takeover approach of the year, while Imperial Tobacco climbed after it announced a revised bid for Altadis.

However, the gains could not prevent the FTSE 100 Index from slipping back behind the 6,600 mark as it stood 62.3 points lower at 6596.8 by mid-morning, as the threat of higher UK interest rates and fears over the US economy weighed on investor sentiment.

Supermarket group Sainsbury was up 8p at 593.5p after it confirmed it had received a preliminary approach from Delta Two, an investment fund backed by the Qatari royal family.

Morrisons, also seen as a possible takeover target, benefited from the news with a rise of 2.25p to 318.5p.

But Embassy and Lambert & Butler maker Imperial topped the risers board after it said Spanish rival Altadis had agreed to its revised approach for the company. The group lifted 60p, or nearly 3%, to 2261p.

Mining firm Lonmin continued to suffer after it cut its full year sales forecasts on Monday. The stock was 103p lower at 3730p. Elsewhere in the sector Kazakhmys was off 31p at 1354p, Anglo American fell 69p to 3155p and BHP Billiton slipped 25p to 1461p.

Sugar group Tate & Lyle slid more than 2%, or 14.5p to 585.5p after it downgraded its profits expectations for the year amid tougher trading conditions in US ethanol and European sugar, coupled with higher cereal prices and a weak US dollar.

One of the biggest gains in the FTSE 250 Index came from JD Wetherspoon after the pubs chain posted better-than-expected sales figures. Shares were ahead 36.5p to 592.5p, a near 7% improvement.

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