Britain's FTSE 100 share index recovered earlier losses to end almost flat on Wednesday as news of a bid for energy company Scottish Power helped offset jitters about US mid-term election results.
The electricity sector led the index as Scottish Power, Britain's fifth-biggest energy supplier, soared 8.7 percent, as it confirmed the approach from an unnamed suitor. It had leapt as much as 18 percent earlier in the session. "Power companies have been the bright spot today," said one trader. "Perennial take-over talk could actually amount to something around Scottish Power and that is giving the whole pack a boost."
Positive sentiment in the sector pulled up other utilities, traders said, with British Energy bouncing 4.5 percent. Scottish & Southern Energy was up 4.6 percent, while National Grid, International Power and Kelda Group all added about 2 percent.
The FTSE 100 closed down 5 points, or 0.08 percent, at 6,239, above earlier lows of 6,205.7 and close to Tuesday's 5-1/2-year closing high.
Wall Street stocks slipped slightly after opening in New York on Wednesday, weighed down by US congressional election results showing Democrats sweeping Republicans from control of the House of Representatives and close to taking the Senate too.
"Equity markets around the world are just taking a breather, if you looking across the world it's a common story," said Peter Dickson, economist at Commerzbank.
"If investors say they are taking money off the table because Democrats are back in power then that's certainly going to affect the UK stock market as well." Pharmaceuticals fell, with analysts saying Democrat plans to reform the US healthcare system could hit revenues. Heavyweights GlaxoSmithKline and AstraZeneca both lost about 2 percent.
The UK market was also hit by companies whose shares began trading without a right to the latest dividend payment, taking 8.4 points off the index based on Reuters calculations. Among them, Unilever slipped about 1 percent.
Miners fell on sagging metal prices, with Anglo American falling 2.3 percent, and BHP Billiton and Antofagasta down about 2 percent. Among insurers, Legal & General rose 1.7 percent after a broker recommendation to switch into the "out-perform"-rated insurer and out of Standard Life.
The Edinburgh-based Standard Life earlier reported third-quarter sales just below analysts' expectations, sending its share price down 0.3 percent. Retailers bucked the lower market trend as Marks & Spencer added 1.2 percent after two brokers upgraded price targets following the company's stellar first-half earnings report on Tuesday.
Morrison Supermarket ticked up 1.9 percent, with traders saying it could benefit from a Merrill Lynch downgrade on Tesco which fell 0.5 percent. BT rose 1.1 percent after saying it had unbundled 1 million of its telephone lines for rivals to offer cheaper services, reflecting intense competition in the broadband market.
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