Footsie continues to climb
The performance of Corus shares continued to suggest today that investors remained on standby for a rival approach to Tata’s £4.3 billion offer.
While some traders took money off the table after Tata agreed a deal at 455p, Corus shares remained at 470p as speculation mounted that one of Russia’s steel giants could make a move.
Even though Corus was near the top of the fallers board with a drop of 8.5p, the FTSE 100 Index set new five-year highs, moving within touching distance of 6200 before settling 10.7 points higher at 6166.7 by mid-morning.
The good news came from a stronger-than-expected GDP figure and the sight of the Dow Jones Industrial Average closing above 12,000 for the first time.
Oil stocks were also stronger as OPEC discussed a 300,000 barrels a day cut in production – a move set to stop the slide in oil prices. Royal Dutch Shell lifted 6p to 1826p while BP was ahead 4.5p at 605p.
Much of the market’s optimism was focused on the mining sector, as Kazakhmys rose 26p to 1253p, Rio Tinto lifted 39p to 2834p and BHP Billiton cheered 14p to 1034p.
Sentiment remained weak in the banking sector as traders continued to digest yesterday’s bad debts warning from internet operation Egg.
Halifax Bank of Scotland fell 9p to 1068p, while Barclays was off 5p at 710p and Lloyds TSB dipped 6p to 562.5p.
Signs of weak consumer sentiment in the UK also affected retailers, with B&Q owner Kingfisher down 2.25p at 255.75p and Primark operator Associated British Foods off 5.5p at 812p.
Elsewhere, shares in media group SMG lost a quarter of their value after the company said it would miss profits expectations, mainly because of weak fourth trading at its television and cinema businesses. With SMG also in talks with banks over its financial covenants, shares fell 18p to 51p – a drop of 26%.
