London close: Footsie lower as US dives
Selling in London following early losses on Wall Street dragged the leading index back from a near six-year high, with J Sainsbury sinking on fading bid hopes.
US private equity group CVC Capital Partners said it has pulled its 582p per share bid for the UK's third largest supermarket, leaving the retailer's shares among the worst performers.
"After a number of discussions between the board of Sainsbury and the consortium, it became clear that the consortium would be unable to make a proposal that would result in a successful offer," said CVC.
The news helped Marks & Spencer though as investors bet that the focus would now shift to the high street favourite. Private equity buyers are said to be circling.
Tesco also edged higher as the British Retail Consortium said retail sales grew at their fastest rate for almost a year in March, although Kazakhmys fell after former boss Y K Cha sold his remaining 4.5% stake in the Kazakhstan firm.
But fellow miner Xstrata did well on news it is selling its aluminium assets to private equity firm Apollo Management for $1.15bn in cash following a strategic review.
There were also gains for Severn Trent after Morgan Stanley upped the water utility to 'equal-weight' from 'underweight' and raised its target to 1,570p.
News that Terra Firma Partners and Wellcome Trust have appointed a financial adviser for a possible £10bn-plus bid for Alliance Boots sent the chemist chain group into the blue.
Hammerson and Friends Provident were lower though after going ex-dividend, while Lehman Brothers hurt the real estate sector, dropping the major players to 'equal-weight' from 'overweight'. Land Securities, British Land and Slough Estates all fell.
Elsewhere, oil giant Royal Dutch Shell is to pay £353m to settle with non-US investors over its 2004 reserves restatement problems and says it will offer the same proportional terms to US investors. Higher oil prices helped the shares.
Miner Vedanta Resources ended weaker despite reporting a significant increase in full-year production of all metals, as prices of copper and zinc fell in the fourth quarter. Aluminium output in the year ended March rose to 351,000 tonnes from 210,000 tonnes a year ago, while copper cathode production from its Indian operations rose 15% to 313,000 tonnes.
Water utility Kelda eased after analysts at HSBC cut the stock's price target to 988p from £10.16.
Further down, printer St Ives expects a recovery in full-year profits, despite a slide in the first half in "extremely challenging" trading conditions. Interim profits to end-January were £10.7m, down from £14.2m, on revenues of £209.2m, up from £195.6m.
Gem Diamonds is to buy AIM-listed BDI Mining Corp in an all-cash deal worth 37p for each BDI Mining Share and valuing the company in total at about £42m. Nearly 60% of BDI shareholders have agreed the offer.
Northern Racing plunged after the racecourse owner confirmed it has granted a 'short period' of exclusivity to a potential bidder regarding a possible cash offer of no more than 200p a share.
Shares in SMC Group rocketed higher despite announcing pre-tax profits that were below expectations due to strong trading in the first quarter of the current year.
FTSE 100 - Risers
Marks & Spencer Group (MKS) 715.00p +2.88%
Alliance Boots (AB.) 1,050.00p +1.45%
Scottish & Southern Energy (SSE) 1,597.00p +1.20%
Alliance and Leicester (AL.) 1,139.00p +1.06%
Severn Trent (SVT) 1,480.00p +1.02%
Compass Group (CPG) 353.00p +0.93%
BP (BP.) 559.50p +0.90%
Standard Chartered (STAN) 1,492.00p +0.81%
Xstrata (XTA) 2,779.00p +0.80%
Cable and Wireless (CW.) 176.40p +0.68%
FTSE 100 - Fallers
Kazakhmys (KAZ) 1,174.00p -3.77%
Wolseley (WOS) 1,244.00p -2.35%
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Sainsbury (SBRY) 526.00p -2.32%
Carnival Corporation (CCL) 2,388.00p -2.29%
Friends Provident (FP.) 193.25p -2.15%
William Morrison (MRW) 309.25p -2.06%
Imperial Chemical Industries (ICI) 536.75p -2.01%
Vedanta Resources (VED) 1,406.00p -1.82%
British Airways (BAY) 503.50p -1.76%
3i (III) 1,169.00p -1.76%
FTSE 250 - Risers
Northgate Information Solutions (NIS) 88.00p +4.76%
British Energy Group (BGY) 518.00p +4.17%
Aquarius Platinum (AQP) 1,675.00p +3.40%
Northgate (NTG) 1,161.00p +3.11%
Hunting (HTG) 780.00p +2.70%
Spirax (SPX) 1,056.00p +2.57%
Ashmore Group (ASHM) 302.50p +2.54%
Mouchel Parkman (MCHL) 473.75p +2.54%
Woolworths Group (WLW) 30.50p +2.52%
Northumbrian Water Group (NWG) 329.25p +2.49%
FTSE 250 - Fallers
Hochschild Mining PLC Ord 50p (WI) (HOC) 344.50p -5.49%
F&C Asset Management (FCAM) 182.00p -4.08%
Morgan Crucible (MGCR) 280.25p -3.78%
Rentokil Initial (RTO) 168.00p -3.17%
St Modwen Property (SMP) 710.00p -2.74%
PZ Cussons (PZC) 170.50p -2.71%
Collins Stewart (CLST) 252.00p -2.70%
Spectris (SXS) 891.50p -2.52%
Marshalls (MSLH) 344.75p -2.48%
Pendragon (PDG) 118.50p -2.47%
