Mining firms led the FTSE 100 Index lower by midday today as the takeover buzz in the sector fizzled out in London and metal prices dipped.
BHP Billiton shares were 2% down after it launched a $40bn (€31bn) hostile takeover bid for the world’s biggest fertiliser producer - Canadian firm PotashCorp – following the rejection of an earlier “wholly inadequate” proposal.
Lower metal prices meanwhile meant the heavyweight sector dominated the fallers’ board as the Footsie dropped 33.3 points to 5317.3.
The slide came after a weak session in Asia, with investors continuing to fret about the state of the global economic recovery. Wall Street’s Dow Jones Industrial Average was expected to open flat later after a 1% gain yesterday.
BHP Billiton shares dropped 38.5p to 1877.5p and Eurasian Natural Resources fell 30p to 938p, while in the banking sector HSBC eased 13.4p to 654.3p.
HSBC was one of a host of blue-chip heavyweights which turned ex-dividend today, meaning investors are not entitled to the latest payout.
Other ex-div top flight stocks included Standard Life, off 4.3p to 209.3p, British American Tobacco down 45.5p to 2235p, property group Hammerson off 5.9p to 363.5p and Financial Times publisher Pearson, which was 13.5p down at 978p.
The pressure on BP shares in recent days continued as fears over the cost of litigation relating to the Gulf of Mexico oil spill left shares 5.25p lower at 402.75p.
Guinness drinks giant Diageo also slipped lower today after analysts at Collin Stewart said the firm was due for a tough 2011 because of its dependence on markets with high unemployment. Shares were off 17p to 1088p.
But retailer Marks & Spencer made progress after drawing in more positive broker comment, as Arden Partners upgraded the stock from ’reduce’ to ’neutral. Shares added 3p to 341.8p as Arden said it was impressed by recovery signs at the food business.
Elsewhere on the risers board, British Airways made more progress after workers at airports operator BAA cancelled a planned strike earlier this week, lifting shares 4p to 225.2p.
Transport group Stagecoach made healthy progress in the FTSE 250 Index after it reported a 7% rise in like-for-like revenues at its South West Trains rail division. With its North American coach arm also showing signs of recovery, shares lifted 3.7p to 171p.
Rival National Express was cheered by the update, up 4.3p to 266.7p.