Falling shares in miners, a softening oil price and more worries about the US economy knocked back the FTSE 100 for the third session running yesterday.
The index of leading shares ended down 34.1 points, or 0.6%, at 6126.8. It had spent the whole session in the red and extended its losses in the afternoon when Wal-Mart intensified fears over outlook for US consumer spending. The group, the world's biggest retailer, said sales had undershot its forecast, adding to concerns after last week's surprisingly weak US third-quarter GDP data.
Back in London, one blue chip that managed to shrug off the overall gloomy start to the week was Edinburgh-based insurer Standard Life.
Its shares rose after reports that French insurance group Axa was considering a bid. They closed up 4.5p, or 1.6%, to 287.5p, one of the biggest gainers in the FTSE 100.
Dealers said the rise in the shares might also be due to the imminent departure of finance director Alison Reed. There is speculation that her successor will be David Nish of ScottishPower.
Elsewhere in the financial sector, Royal Bank of Scotland announced after the close that it had made an acquisition in the US. The news might raise eyebrows this morning after Sir Fred Goodwin, the chief executive, had promised no more deals were on the cards. However, traders noted that the acquisition of GreatBanc was small beer, costing just $180m. Even so it is the 26th acquisition by the bank's US arm, Citizens, since 1988. RBS shares closed 4p down at £18.57 yesterday.
The day's biggest loser on the FTSE 100 was drugmaker Shire. Shares in the group had enjoyed some strong gains on Friday after a solid set of results. But profit-taking set in yesterday and left Shire down 27p, or 2.8%, to 940p.
Cadbury Schweppes was also heading downwards, after the drinks and sweets group abandoned a growth target for operating margins. The confectioner said it would still seek to expand margins but the shares closed down 8p, or 1.5%, at 529p.
Oil prices fell back with US light crude $1.90 lower at $58.85 a barrel as London share trading closed. As a result there were losses for Royal Dutch Shell, down 4p to £18.86, and BP, 10.5p lower at 591.5p. But lower crude prices helped other stocks, with budget airline easyJet up 5.75p at 521.25p.
Another sector on the back foot was mining, with dealers taking profits following a good run last week. There was also some selling on the back of a mixed production report from copper miner Kazakhmys. Shares in the group were down 31p, or 2.6%, at £11.85, making them the second-biggest loser on the FTSE 100.
Rio Tinto shed 39p, or 1.4%, to £28.58 and Xstrata slipped 44p, or 1.9%, to £22.21, while Anglo American, BHP Billiton and Vedanta Resources also fell.
The Kazakhmys update was one of the few corporate releases out yesterday in a quiet start to an otherwise packed week.
Today sees an update from another miner, Antofagasta, and results from Imperial Tobacco, first-half numbers from sugar maker Tate & Lyle are out on Wednesday, household goods group Unilever reports on its third quarter on Thursday and Friday sees results from satellite broadcaster BSkyB and British Airways, along with closely watched US non-farm payroll data.
The one big update yesterday was from Pearson. The Financial Times publisher said it was on track to make record profits this year. The group, also the world's largest educational publisher, reported a 15% increase in operating profits for the first nine months of the year and said it was trading strongly. But the shares fell 12p, or 1.5%, to 769p as analysts at broker Panmure Gordon reiterated their sell recommendation.
"This was a disappointing update. No changes to forecasts are likely and the valuation looks very stretched at current levels. Guidance on education is intact, but there is a mild deceleration on growth in most businesses," said Panmure's media analyst, Alex DeGroote.
Elsewhere in the media sector, ITV shares slipped 1.75p, or 1.6%, to 105p after weekend reports that it was considering a bid for troubled Scottish broadcaster SMG. Miranda Carr, analyst at investment firm Bryan Garnier, said SMG stakeholder ITV could be able to pick up the Scottish group cheaply but there were still drawbacks.
"With no chief executive at either company, the TV advertising market still in decline and better investment targets elsewhere we do not think an offer would be welcomed by the market," she said. SMG was up 4p, or 7.1%, at 60p.
Elsewhere among the mid caps, Wellington Underwriting was up 6.25p, or 5.6%, at 117.75p after larger rival Catlin agreed to buy the insurer for £591m. Catlin was one of the FTSE 250's biggest fallers, down 17p, or 3.3%, at 491.5p.
Among the small caps, ImmuPharma added 4.5p, or 6.4%, to 74.5p after news of a drug trials success.
On the Aim junior market, online gaming group Sportingbet added 3p, or 6.6%, to 48.75p in the wake of weekend reports of possible mergers in the sector, and betting shops looking for acquisitions to gain a bigger internet presence.
Go digital
One to keep an eye on is UBC Media, unchanged at 17p last night. The digital radio specialist has made headlines this year with systems that download music over digital radio, including on mobile phones. The group is enjoying rising demand for its software from overseas and it may be about to sign a significant deal with Australian commercial radio to adopt its digital radio software. UBC has already promised investors it will earn $0.5m from the North American software market this year as broadcasters wake up to the need to branch into the digital world. UBC's shares have fallen around a third since the start of 2006, but with results in late November likely to show a significant pick-up in software revenues, they may be seen as a bargain.