FTSE 100 close: Barclays soars on bid talks
The FTSE 100 index closed in negative territory today, despite a solid day for banking stocks after Barclays confirmed takeover interest in its $10bn (£6.6bn) Barclays Global Investors arm.
Rallying call: Will the rally continue after a setback?
Barclays leapt as much as 10% higher at one stage, helping its rivals recover ground lost in this week's sharp correction.
The Footsie closed 14.5 points in the red, at 4348.1.
On Wall Street, the Dow Jones industrial average was up 3 points at 8,334.3. Better-than-expected surveys of New York-area manufacturing activity and industrial production, and the news that inflation was unchanged in April, helped avert expected falls in US shares.
In the main market-moving news of the day, Barclays said it had been in talks over a sale of its BGI fund management arm with bidders including US money manager BlackRock.
Barclays has already agreed the sale of exchange-traded funds unit iShares, part of BGI, for £3bn($4.5bn) to buyout firm CVC Capital Partners. As part of that deal, it is allowed to seek rival offers under a 'go shop' clause before 18 June.
Shares closed 14.75p ahead at 267.75p.
This stabilised the sector after a sharp correction seen earlier in the week. Royal Bank of Scotland was unchanged at 39.5p and Lloyds Banking Group cheered 1.4p to 89.2p.
Some mining giants were also marching higher after a bout of recent profit taking, although the sector put in a mixed performance. Vedanta Resources rose 64p to 1316p, while Fresnillo and Lonmin were down 12.5p at 618.5p and 23.1p at 1171p respectively.
The market was also held back by falls for property firms, led by Land Securities, which declined 16.5p to 473.5p after reporting a £4.8bn loss earlier this week. Sector counterpart Hammerson fell in tandem, down 7.25p at 278.75p and British Land followed, off 5.25p at 391.75p.
Heavyweight stock Vodafone was also in the red, down 2.9p at 123.2p, ahead of results next week from the mobile phone giant, while insurers joined it on the fallers board, continuing to pull back from gains in their recent rally.
Standard Life was worst affected, off 6.9p at 182.7p, while Aviva dropped 5.25p to 312.75p.
Engineer Invensys rose 4.25p to 228.25p, extending Thursday's 13% rise after beating expectations on operating profit and resuming the payment of a final dividend. Both JPMorgan and Citigroup raised their price targets on the stock.
Outside the top flight, Ladbrokes shares were down more than 13% - off 20p to 204.75p - after it said gross profits fell 34% in the first four months of the year. The bookmaker blamed race cancellations and poor results at the Cheltenham Festival, but reported the presence of more encouraging signs in recent weeks.
'Ladbrokes is underperforming its closest peer [William Hill] across each of the key business units. Perhaps the most notable area is online, where the modest decline in Ladbrokes' net revenue compares unfavourably with William Hill [up 10%],' says Goldman Sachs analyst Patrick Hargreaves.
Shares in Premier Farnell rose 5% after HSBC upgraded the electronic components distributor to 'overweight' fom 'neutral', and lifted its target price to 180p from 120p. HSBC says the company, which reported slowing sales in March, is a 'cyclical play'.
Premier Farnell shares have fallen 13% since its 2009 high of almost 163p, and today were 6.5p up at 146p.
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