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Market's high dips to a low; market WATCH.

THE London market retreated into negative territory yesterday as investors banked profits from last week's highs while exercising caution ahead of forthcoming UK and US interest rate decisions.

Falling oil prices and a drop in US stocks in early trading further dampened spirits in the City, with takeover activity at Reuters and speculation of potential bids for retailers failing to boost London's leading shares.

The FTSE 100 Index closed down 53.3 points down at 6550.4, giving back most of the gains seen on Friday.

Media giant Thomson's pounds 8.8bn move to acquire rival Reuters secured Reuters' place as one of the session's biggest risers, with shares up 2%, or 14.25P at 63op, building on Friday's 25% leap.

Supermarket chain Morrisons also featured highly on the leaders' board as speculation of a private equity bid continued to bubble. The stock advanced nearly 2%, or 6p, at 335.25p.

Argos owner Home Retail Group surged more than 3%, or I5p to 483p, with traders linking the stock to speculation regarding private equity interest. It is thought traders are anxious not to miss out on any potential opportunities given the current takeover market.

The mining sector was hit by profit taking after copper prices slipped back from 11-month highs after it emerged that the strike in Peru, which had been helping to drive prices higher, had been resolved.

Vedanta Resources lost 42p to I386p, BHP Billiton was 33p lower at n85p and Anglo American drifted 6op to 282op.

Banking stocks struggled ahead of the forthcoming rate decisions, with HBOS down I7p at 1073P, Northern Rock off 9p at iO48p and Alliance and Leicester falling more than 1%, or I3p to H48p.

Hanson topped the fallers' board as it declined almost 4%, or 40.5P at iO3op, losing some of the gains seen at the end of last week after Germany's HeidelbergCe-ment said it was considering a bid for the British building materials firm.

In the second tier, low-cost carrier easyjet was down 7%, or 48.5p, at 631.5p, after revealing its revenues per seat declined last month despite rising passenger numbers.

The biggest Footsie risers were Tate and Lyle up 2i.5p at 664.5p, Home Retail Group, Reuters and Unilever up 32p to i658p.

The biggest Footsie fallers were Hanson, Vedanta Resources, Rolls-Royce off i8p at 493.5P and Hammerson off 44p at I58ip.
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Title Annotation:Business
Publication:Daily Post (Liverpool, England)
Date:May 9, 2007
Words:397
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