Mixed fortunes on FTSE

A major deal in the oil and gas industry failed to keep the FTSE 100 Index afloat at midday today after further evidence of a slowdown in the global economy.

Investors were initially cheered by Cairn Energy's plans to sell 51% of its Indian operations to Vedanta Resources for more than £5bn (€6.1bn).

Shares in both companies made headway, with Cairn Energy shares up by 3%, or 14.7p higher, at 483p while Vedanta shares were 105p higher at 2158p.

But falls for oil giant BP, insurance group RSA and satellite firm Inmarsat saw the FTSE 100 Index drop 10.7 points to 5264.7.

Asian markets had a mixed session after a sharp slowdown in Japan's growth added to recent figures on the US and Chinese economies that suggested the global recovery is losing momentum.

Latest government data showed Japan's GDP growth slowed to 0.4% in April to June from the previous two quarters - a level much lower than expected.

Japan consequently lost its place as the second biggest world economy, slipping behind its Asian neighbour China. Over the year as whole, Japan's economy is forecast to expand by between 2% and 3%, while China's is growing at around 10% every year.

BP shares dropped after investors reacted to an announcement from the state of Alabama that it is suing BP and two other companies over the Gulf of Mexico oil disaster.

Shares in the beleaguered firm were 6.6p down at 409.8p, after the state said it was making the claim against BP, Halliburton and Transocean for the "catastrophic harm" caused by the crisis.

More Than owner's RSA shares were 1.4p lower at 126p after Aviva rejected its proposal to buy the firms' home and motor insurance operations in the UK, Canada and Ireland.

Aviva said it had no intention of splitting its general insurance and life assurance divisions.

A statement released today by the firm also looked to address concerns from shareholders about the company's strategy in the wake of the recent underperformance of Aviva's shares in recent months. The stock was 2.4p lower at 385p.

Communications provider Inmarsat's shares were down 10.5p to 678p after evidence of challenging trading in its core maritime business in its first-half results last week continued to have an effect.

Financial services group Prudential and retailer Next were among the London market's risers, with their shares rising 8.5p to 561p and 26p to 1950p respectively.