Growing concerns over the US economy sent UK blue chips plunging into negative territory today, with news of a raft of high profile potential takeovers unable to stem the losses.
Cautious comments from US Federal Reserve Chairman Ben Bernanke added to early session fears over the sub-prime mortgage default crisis in America, combining to knock investor confidence on both sides of the Atlantic.
The FTSE 100 Index closed 92 points down at 6567.1, with its Wall Street counterparts suffering equally large losses after Mr Bernanke said growth in the economy would be lower than expected this year.
Merger and acquisition activity involving some of the UK’s biggest blue chips failed to provide respite, with Sainsbury’s confirmation it had received a preliminary approach from Qatari royal family-backed investment fund Delta Two, offering little distraction.
Shares in the supermarket giant closed up 5p at 590.5p, but still below the 610p reportedly proposed by the bid group, which is controlled by the Prime Minister of Qatar, also cousin to the country’s emir.
Morrisons, often seen as a possible takeover target itself, had benefited alongside Sainsbury’s in early trading, but slipped 0.5p to close at 315.75p, amid the wider market troubles.
The second big takeover story of the session saw Imperial Tobacco make strong advances, after it announced a revised bid for Altadis.
Embassy and Lambert & Butler maker Imperial said Spanish rival Altadis had agreed to its revised approach for the company, lifting shares 34p to 2235p.
Water utility companies Kelda Group and Severn Trent topped the risers board, regaining some of yesterday’s losses seen amid a raft of broker rating changes from UBS. The shares were up 18.5p at 889p and 27p at 1370p respectively.
Mining firms suffered the most among the day’s share fallers after sector giant Lonmin cut its full-year sales forecasts on Monday.
The stock was 138p lower at 3695p. But Anglo American topped the fallers board, down 124p at 3100p. Kazakhmys was also off, down 39p at 1346p, while BHP Billiton slipped 42p to 1444p.
Sugar group Tate & Lyle slid 3%, or 16.5p to 583.5p 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 12%, or 64p at 619p, thanks to its results showing like-for-like sales growth of 4.9%. Its FTSE 100 rival Mitchells & Butlers also lifted on the news, up 16p at 892p.
Elsewhere music label EMI, which boasts artists including Robbie Williams and Joss Stone, was moving in the opposite direction after rival Warner Music ruled out tabling a counterbid to Terra Firma’s agreed offer.
Shares closed down 5.25p at 261.75p
The biggest Footsie risers were Kelda Group up 18.5p at 889p, Severn Trent up 27p at 1370p, Mitchells & Butlers ahead 16p at 892p and SAB Miller up 21p at 1310p.
The biggest Footsie fallers were Anglo American off 124p at 3100p, Lonmin down 138p at 3695p, Next down 63p at 1888p and Experian Group down 19p at 591p.