Boost for FTSE

Takeover talk in the mining and telecoms sectors provided a boost for London’s leading share index today.

Takeover talk in the mining and telecoms sectors provided a boost for London’s leading share index today.

The FTSE 100 Index advanced 27.1 points ahead to 5557, with miners littering the risers board on speculation that steel giant Lakshmi Mittal could make a move for Rio Tinto.

Investors also cheered news of a takeover in the telecoms sector, with Cable & Wireless tabling a higher £329 million offer for smaller rival Thus.

Thus’ board said the offer was “not such a compelling proposal” that it should recommend the bid to shareholders, but its shares soared 20%, or 28.75p to 174p, while C&W shares rose 2%, or 3.2p to 150.6p.

However, miners took centre stage in early trading, with Rio Tinto up more than 2% – 139p ahead at 5982p – as market talk suggested Mittal may challenge BHP Billiton to take over Rio.

Meanwhile Anglo American – said to be eyeing both BHP and Rio’s assets if a merger of the two goes ahead and forces disposals – gained 65p to 3461p.

Other miners linked with consolidation activity, Xstrata and Eurasian Natural Resources, also featured, cheering 70p to 4004p and 8p to 1350p respectively.

Mobile phone giant Vodafone provided another fillip for the telecoms sector, after revealing a music tie-up with social networking site MySpace.

Its shares rose 3%, or 3.8p to 145.5.

ITV was the top flight’s worst performer after downbeat comments on prospects for media companies from Deutsche Bank, which cut the broadcaster’s target price. ITV was 3p lower at 44.5p, or 6%.

In the FTSE 250, Southern Cross – the UK’s biggest care home operator – saw shares lose more than two thirds of their value after warning over profits. Shares plunged 211.75p to 101.25p.

Daily Mirror and Sunday Mirror publisher Trinity Mirror also suffered shares misery after issuing a profit warning.

It said full year operating profits were set to come in around 10% less than market expectations, sending shares down 25%, or 37.75p to 113.75p.

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