Variable performances on world markets

The FTSE 100 Index was dragged lower today as continued fears over the pace of economic recovery offset the impact of merger and acquisition activity in the oil and gas sector.

Wall Street’s Dow Jones Industrial Average opened 0.5% down as yesterday’s surprisingly weak manufacturing and jobless figures remained in the minds of investors.

In London, the FTSE 100 Index surrendered a positive start to stand 31.2 points lower at 5180.7.

This was despite more gains for gas explorer and production group BG as speculation continued to swirl in the market that two possible bidders were willing to pay at least £16 a share, valuing the company at around £54bn (€66bn).

BG rose 5% or 55p to 1085p, contributing to a 10% improvement over the last week, as traders pondered the possible interest. Royal Dutch Shell, ExxonMobil and Petrobas were among the names being mentioned in the City.

The speculation comes in the week that mining giant BHP Billiton launched a bid worth $40bn (€32bn) for Canada’s PotashCorp, which is the world’s biggest fertiliser producer.

In other takeover developments today, Korea’s state oil company launched a hostile bid worth £1.7bn (€2bn) for UK explorer Dana Petroleum. Dana has so far rejected the interest but its shares rose 6%, or 101p to 1796p, as Korea National Oil Corporation said 48% of shareholders backed its proposal.

Cairn Energy, which this week agreed to sell most of its stake in Cairn India in a deal with Vedanta Resources worth up to $8.5bn (6.7bn), rose 3.1p to 462.4p, while Tullow Oil also benefited from the recent bid talk as it added 13p to 1296p.

There were slim pickings elsewhere for investors as the market digested the continued economic uncertainty in the United States. Building supplies firm Wolseley, which generates a large slice of its business in North America, fell 3% or 41p to 1283p.

Outside the top flight, shares in All Bar One owner Mitchells & Butlers fluctuated after it agreed to sell 333 pubs to a private equity firm as part of its withdrawal from the drinks-led and late-night high street bars sector.

The disposal for £373m (€456m) will give Mitchells greater firepower to accelerate the expansion of its core food-led business, analysts said. Shares, which dipped earlier in the session, were up 0.3p to 296.1p.