FTSE in positive territory

Satellite broadcaster BSkyB led the FTSE 100 Index higher today after rejecting a £12bn (€14bn) bid by its biggest shareholder.

The offer from Rupert Murdoch’s News Corporation for the 61% of the firm it does not already own left shares 19% or 112p ahead at 712.5p, as the board snubbed the 700p-a-share proposal but left the door open to an offer of 800p or more.

The wider Footsie moved into positive territory to stand 21.7 points higher at 5223.9 after a shaky start following a downgrade of Greek debt by ratings agency Moody’s.

Nerves over inflation were soothed by a bigger than expected fall in the Consumer Prices Index to 3.4% in May, making rate hikes to clamp down on soaring prices less likely.

Wall Street’s Dow Jones Industrial Average was also expected to open higher today after losing ground last night in the wake of the Greek downgrade.

In London, shares in BP steadied 3.3p to 358.75p after losing as much as 10% on Monday.

Ratings agency Fitch downgraded the firm’s debts, while the oil giant is still under pressure amid demands for it to set aside $20bn (€16bn) in a special account to pay for damages and clean-up costs as a result of the Gulf of Mexico disaster.

Tesco’s shares recovered from a nervous start after the supermarket giant said UK like-for-like sales growth slowed to 0.1% in the three months to May 30. The grocer later pulled 7.5p ahead to 399.15p as analysts said the UK slowdown was not a surprise and flagged up its international growth prospects.

Rival Sainsbury’s – which updates tomorrow – was ahead 3.5p to 323.2p while Morrisons was 2.4p dearer at 260.1p.

Among the fallers, mobile satellite firm Inmarsat was the leading Footsie casualty after brokers at BoA/Merrill Lynch cut the stock to underperform, sending shares more than 4% or 37.5p down to 783.5p.

Argos and Homebase owner Home Retail Group also fell again as Deutsche Bank became the latest broker to cut its rating on the firm following last week’s disappointing trading update. Shares were 2.6p off at 228.9p.

In the FTSE 250 Bellway lost ground after the housebuilder reported a slight dip in site visits and weekly sales following the general election amid uncertainty over looming cuts by the coalition Government. Shares fell 2% or 12.5p to 622.5p.