FTSE Close: National Grid up; BP, Inmarsat down

 

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Stock market

The FTSE 100 Index paused for breath today after its recent shares rally as commodity stocks posted heavy falls.

London's blue-chip share index closed down 36.9 points to 5556, with falls mirrored across Europe and Wall Street.

The Dow Jones Industrial Average fell more than 0.5% soon after opening amid mixed economic news.

Resources-based stocks have gained in recent sessions following a run of positive economic figures, including a better-than-expected Chinese manufacturing report. This helped the Footsie to climb 44 points on Friday.

But with investors on edge ahead of jobs numbers in the United States later in the week, Xstrata fell 32.5p to 1209p and BP slipped 10.4p to 430.1p after showing signs of recovery in recent days.

News of a surprise pick-up in UK construction activity last month failed to help stocks, although the industry survey data gave sterling a boost. The pound performed well against most major currencies, particularly against a weakened euro, up 0.8% to 1.16 euros.

Back in the FTSE 100, satellite firm Inmarsat was another faller after news that hedge fund Harbinger was looking at the possible sale of all or part of its 28% shareholding in the group.

Shares in Inmarsat dropped 13.5p to 655p as it hit hopes that Harbinger will bid for the company.

Shares in supermarket Tesco made tentative gains ahead of the group's keenly awaited half-year results tomorrow, with shares up 2.3p at 430.4p.

While profits are expected to rise to £1.6bn compared with £1.42bn a year earlier, all eyes will be on latest sales performance after growth nearly ground to a halt in its first quarter.

News on key hires helped National Grid and FTSE 250 firm Yell move higher.

Power group National Grid rose to the top of the Footsie risers board - up 12.5p to 553.5p - as it named former Cadbury finance chief Andrew Bonfield as finance director from November 1.

He will replace Steve Lucas, who retires from the board at the end of this year.

Yellow Pages firm Yell added 1p to 15.5p on the appointment of Tony Bates - formerly of telecoms group Colt and music firm EMI - as chief financial officer.

Also in the FTSE 250, Premier Foods shares jumped 10% after the UK's biggest food producer confirmed it was considering a sale of meat substitute Quorn as it comes under pressure to reduce a £1.4bn debt mountain. Shares improved 1.7p to 17.9p as it said it received a number of takeover approaches for the business.

There was also a rise for Newcastle-based oil services firm Wellstream after a newspaper linked American giant General Electric to a takeover bid. Shares jumped 15.5p to 789p.

The biggest Footsie risers were National Grid ahead 12.5p to 553.5p, BT Group up 3p to 145.8p, Wolseley up 19p to 1601p and Morrisons up 3.1p to 296.5p.

The biggest Footsie fallers were Xstrata off 32.5p to 1209p, Kazakhyms down 38p to 1423p, BP down 10.4p to 430.1p and Invensys down 6.2p to 298p.

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The Dow Jones industrial average rose just three points in early morning trading, to 10,833.7 in early morning trading.

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A drop in metal and oil prices dragged heavily-weighted miners into the red, with the wider FTSE 100 Index down 23.3 points to 5569.7.

Satellite firm Inmarsat is still the biggest faller after news that hedge fund Harbinger was looking at the possible sale of all or part of its 28% shareholding in the group.

Shares in Inmarsat dropped 19.5p to 649p as it hit hopes that Harbinger will bid for the company.

Investors in supermarket Tesco trod water ahead of the group's keenly awaited half-year results tomorrow, with shares down 0.2p to 428p.

While profits are expected to rise to £1.6bn compared with £1.42bn a year earlier, all eyes will be on latest sales performance after growth nearly ground to a halt in its first quarter.

Power group National Grid rose 8p to 549p in the top tier as it named former Cadbury finance chief Andrew Bonfield as finance director from November 1.

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Weak commodity stocks mean the London market has started the week in the red.

The FTSE 100 index was 29.9 points lower at 5,563 after climbing 44 points on Friday following better-than-expected Chinese manufacturing figures.

'Interest is probably going to pick up later in the week. We've got Bank of England and ECB interest rate decisions, and obviously the monthly unemployment data from the States on Friday,' said Richard Hunter, head of UK equities at Hargreaves Lansdown.

Commodity stocks gave up some of their gains at the end of last week, with Cairn Energy down 12.5p at 444.5p and BP off 6.85p to 433.45 after showing signs of recovery in recent days.

Among the miners Xstrata fell 17.5p to £12.24, as speculation arises that Singapore firm Sin-Tang Developments is planning a counter-bid to Xstrata's $416m offer for Australia's Sphere Minerals.

Inmarsat shed 23p to 645.5p after the Sunday Times reported that US hedge fund Harbinger Capital is planning to sell a 10% stake in the British satellite firm, worth close to £300m.

It was a mixed picture among the banks. Royal Bank of Scotland shed 0.1p to 47.57p after the Daily Mail said the part state-owned bank has the most to lose in the event that economic laggard Ireland cannot repay its debts.

Many British banks may need another state bailout next year and their borrowing requirements could hit £25bn a month, the New Economics Foundation thinktank said.

Wolseley grabbed the top spot on the blue-chip leader board, up 54p to 1,636p, as Credit Suisse started coverage on the building supplies firm with an 'outperform' rating and a 1,855p price target.

In the FTSE 250 Index, shares in Premier Foods jumped 13% after the UK's biggest food producer confirmed it is considering a sale of meat substitute Quorn as it comes under pressure to reduce a £1.4 billion debt mountain.

Shares were 1.8p higher at 18p.

There was also a rise for Newcastle-based oil services firm Wellstream after a newspaper linked American giant General Electric to a takeover bid. Shares jumped 11.5p to 785p.

Elsewhere in the second tier, directories firm Yell rose 2%, or 0.2p to 14.7p, after it filled a key position with the appointment of Tony Bates as chief financial officer.

Meanwhile, the former deputy governor of the Bank of England, John Gieve, on Monday shrugged off suggestions that the economy was heading for a Japanese-style slump and urged the central bank not to print more money.