Friends lead London market

Life insurer Friends Provident led the London market today amid trader talk of a potential bid for the company.

The insurer made gains of nearly 4%, or 6.7p, to 185.5p as speculation over a possible offer from French rival AXA or a private equity buyer lifted the stock.

Friends’ performance was one of the few bright spots in a flatter market which lost some of the early momentum from a strong US close, with the FTSE 100 Index just 5.6 points higher at 6645.8 at the mid-session.

But catalytic convertor-to-chemicals firm Johnson Matthey made strong gains - up 42p to 1870p – after an upgrade from Citigroup talked up the group’s opportunities for US growth.

Positive broker sentiment also helped B&Q owner Kingfisher up 2.5p to 224.5p after Deutsche Bank said private equity buyers could be prepared to pay 250p a share for the business.

Among the fallers, sugar and starch group Tate & Lyle made further losses following its profits warning earlier this week. The company was down nearly 1%, or 4.5p, at 585.5p.

But telecoms firm Cable & Wireless – today facing protests from shareholders over its lucrative executive bonus scheme at the company’s annual meeting – was the Footsie’s leading faller, down 2.6p to 186.2p.

In the FTSE 250, Debenhams was the biggest faller after Icelandic investment group Baugur said it had “no current intention” to make a bid for the department store chain despite building up a near-8% stake in the business. The stock was off 4.15p – more than 4% – at 132.75p.

Elsewhere, cannabis-based drugs manufacturer GW Pharmaceuticals was hit by delays to its key cannabis-based drug Sativex.

Shares in the company plunged 26p to 66p – more than 28% – after it said European regulators had asked for further studies to be carried out into the treatment.