Footsie builds on gains
Takeover activity continued to set pulses racing in London today as the FTSE 100 Index consolidated its position above the 4900 barrier.
Mining group Xstrata topped the charts after raising its offer for Australian rival WMC Resources, while bid news also helped ports operator Mersey Docks and foam maker British Vita to make strides in the second tier.
The Footsie closed 10 points higher at 4916.2 despite worries over higher interest rates in the US.
Analysts were braced for the Federal Reserve to announce a quarter-point hike in US rates to 2.5%, which will have a knock-on effect on demand for UK goods.
There was mixed economic news in London, with figures from the Chartered Institute of Purchasing and Supply showing growth in housebuilding had slowed following interest rate rises.
However, other data showed the housing market remained active, with a rise in mortgage approvals and continued demand for secured borrowing.
On the corporate front, mining group Xstrata rose 5% or 49p to 1012.5p after increasing its offer for WMC Resources by one billion Australian dollars (£776m) to more than 8.4 billion dollars (£6.5bn).
Other miners made progress, with rival Anglo American up 23p to 1302p and Antofagasta rising 15p to 1253p.
BSkyB lifted 3.5p to 575p after revealing it had attracted 192,000 new users in the second quarter – higher than market hopes.
Oil giants Shell and BP made ground to stand a penny ahead at 480p and 0.5p up at 537.5p respectively, even though the price of US light crude fell slightly to just over 47 US dollars a barrel. Shell is due to announce record profits by a UK listed company tomorrow.
Technology group Sage added 1.25p to 199.75p on the back of a towering performance by internet search engine Google overnight. Google – whose shares rose 12% in the US today – posted earnings way above expectations and said revenues had doubled.
Logistics group Exel topped the Footsie fallers with a 41p loss to 832p as the market noted its silence on the sharp rise in its share price yesterday, raising the possibility that bid speculation may be overblown.
Elsewhere, the prospect of a bidding battle for Mersey Docks nudged its shares 21.5p higher to 998p after Peel Holdings made a takeover approach. A private equity firm has already signalled its interest. Other ports groups benefited, with AB Ports up 17p to 493.25p and Forth Ports adding 44p to 1439p.
Foam maker British Vita was the highest riser in the second tier after announcing it had rejected a takeover approach from an unnamed buyer, but was willing to consider offers that offered fair value for the company. Its shares rose 15% or 41p to 320p.
Housebuilder Country & Metropolitan advanced 9p to 203.5p on the back of a successful move into affordable housing.
The biggest Footsie risers were Xstrata, up 49p to 1012.5p, Corus ahead 2.5p to 55.5p, Unilever up 16.25p to 524.25p and Rentokil Initial ahead 4.75p to 157.75p.
The largest losers were Exel down 41p to 832p, BT Group off 3.5p to 204.25p, mmO2 down 2p to 122p and Old Mutual off 1.75p to 126.75p.
