FTSE in the red
A cautious opening to trading on Wall Street – rather than the Chancellor’s gloomy economic forecasts – put the brakes on the London market today.
The FTSE 100 Index followed the lead of the Dow Jones Industrial Average to close 17.7 points lower at 5510.4 – similar to the position seen at the start of Gordon Brown’s pre-Budget speech one hour earlier.
Broadcasters were adding to the pressure on the top flight, as BSkyB dipped by almost 3% in the wake of a proposed alliance between NTL and Virgin Mobile.
Traders appeared to take the forecasts of weaker economic growth in their stride, while oil giants Royal Dutch Shell and BP closed in positive territory even though the Chancellor imposed a second North Sea tax on them this year.
The return of oil prices to near $60 US dollars a barrel helped the pair’s cause with Shell closing 4p higher at 1908p and BP ahead 2.5p at 659p.
Heavy trading took place in shares of the likes of BSkyB and BT which analysts believe have the most to lose from NTL’s plans for a £4.5 billion giant that can add mobile calls to existing offers of internet, fixed-line calls and cable TV.
BSkyB topped the blue-chip fallers’ board – down 15.5p to 489.5p – after NTL confirmed it was in talks to acquire Virgin Mobile for more than £800 million.
The news persuaded many investors in ITV and BT to sell up rather than wait for competition to intensify, causing their shares to both fall 1.5p to 108.75p and 212.75p respectively.
Mobile phone giant Vodafone suffered a similar fate for much of the session before recovering its poise to close 2p higher at 124.75p, helped by the appointment of former HSBC boss Sir John Bond as its new chairman.
News of the offer from US-listed NTL sent Virgin Mobile shares soaring 10% in the second-tier, up 31.5p to 342.5p.
Elsewhere in the FTSE 250 Index, car dealership Pendragon rose 35p to 525p – a jump of 7% after sealing a deal to buy rival Reg Vardy at the weekend. Vardy’s share value has shot ahead in recent sessions and it moved up a further 10p today to finish at an all-time high of 804p.
The price was given a further unexpected boost by a statement from rival Lookers, which said it was still looking at the possibility of a counter-offer.
There were contrasting fortunes for two UK ports operators as the spotlight remained firmly trained on the sector.
P&O shares were on the slide by 22p to 472p after reports said it was unlikely to draw a rival takeover approach to the £3.3bn (€4.8bn) offer from Dubai Ports World.
But the revelation that PD Ports had attracted a second takeover approach sparked a rise of almost 6% in its share price, trading 8p higher at 148p.
The biggest Footsie risers were Vodafone up 2p at 124.75p, Hanson ahead 9p at 623p, Next up 21p at 1455p and Amvescap ahead 5.75p at 415.75p.
The biggest fallers were BSkyB down 14p at 491p, Rentokil Initial off 4p at 164p, Anglo American down 43p at 1826p and BAE Systems off 8p at 343.5p.
