FTSE rallies
The London market resumed its rally today as investors continued their hunt for potential takeover candidates.
Loyds TSB and Scottish Power were catapulted into the top two spots on the risers board by bid speculation, contributing to the FTSE 100 Index closing 11 points higher at 5337.8.
Scottish Power was seen as a target of German rival E.ON, which owns Powergen in the UK, and the excitement lifted its shares by 4% or 21.5p at 546.5p.
Whispers that Lloyds TSB is being circled by American firm Wells Fargo refused to go away as the stock rose 3% or 13p to 478.5p on a good day for the banking sector overall, with only HSBC unable to progress – unchanged at 885p.
A flurry of merger and acquisition activity over the past week has led fund managers and investors to look for other stocks that could be vulnerable to a takeover.
Logistics group Exel has already revealed a bid approach from DHL owner Deutsche Post and plasterboard firm BPB received a hostile offer from French glassmaker Saint-Gobain.
Elsewhere in the top flight today, miners BHP Billiton and Rio Tinto were under pressure after broker Smith Barney downgraded the stocks. BHP was hardest hit, losing 19p to 822p, while Rio lost 44p to 1946p.
The biggest Footsie stock, BP, was also restraining progress after its shares fell 5p to 629.5p.
Royal Dutch Shell also lost 3p to 1879p, with the cost of oil off its recent record high of more than $70 a barrel.
Among firms reporting today, bookmaker William Hill lost 17.5p to 573.5p after weaker returns earlier this year caused interim profits to fall 6% – although it sounded an upbeat note about trading since then.
In the FTSE 250 Index, housebuilder Travis Perkins was out of favour after it warned last month’s cut in interest rates had done little to boost consumer spirits, and said it did not expect its markets to strengthen until 2006. Shares fell 83p to 1475p.
But packaging specialist DS Smith was the heaviest second-tier faller as it warned annual profits would fail to hit market hopes after higher energy costs continued to impact on the business.
The group lost nearly 7% of its value, off 11p to 152.75p, as it said the increase in its energy and fuel costs for the current financial year would be about double the £9 million previously expected.
Investors expect the takeover approach by Sportingbet for rival gaming firm Empire Online to flush out a counterbid, possibly from poker giant PartyGaming. Empire Online rose 7% or 19p to 283p and Sportingbet rose 3p to 371p today, but PartyGaming weakened a penny to 156.75p ahead of its interim results tomorrow.
The biggest Footsie risers were Scottish Power up 21.5p at 546.5p, Lloyds TSB ahead 13p at 478.5p, Severn Trent up 22p at 1017p and Hanson ahead 13p at 606p.
The biggest fallers were William Hill down 17.5p at 573.5p, BHP Billiton off 19p at 822p, Rio Tinto down 44p at 1946p and ICI off 6p at 290.25p.
