Britain's leading share index ended slightly higher on Wednesday, as gains in real estate firms and bid talk surrounding several food retailers struggled to offset a dent from stocks going ex-dividend. The FTSE 100 ended 18 points, or 0.29 percent up at 6156.5, with investors remaining cautious after the index lost nearly 5 percent last week amid a sell-off in global equities.
"The markets are a little bit wary of becoming too bullish," said Neil Parker, a market strategist at Royal Bank of Scotland, "There doesn't seem to actually be much fundamental evidence that's driving these moves, and that always makes me nervous," he added. "The view is that we are going to go lower again. (On the) FTSE, we could be looking for a retrace all the way back to 5,400, and the Dow Jones back towards 10,800."
The real estate sector lifted after J.P. Morgan named British Land, Great Portland Estates and Unibail Holding, as its top picks among the sector in Europe. British Land rose 3.3 percent, Land Securities gained 2.8 percent, Liberty International put on 2.1 percent and Hammerson added 3.6 percent. A clutch of the FTSE 100's biggest losers were trading ex-dividend, with the banking sector suffering most as Barclays, Royal Bank of Scotland, Lloyds TSB and Standard Chartered all traded without the right to dividends.
Lloyds dropped 4.4 percent, Barclays dipped 1.7 percent, Royal Bank of Scotland lost 2.8 percent and Standard Chartered slipped 0.4 percent. Insurer Aviva also went ex-dividend and its shares were down 1.1 percent.
On the upside, Resolution jumped 3.4 percent as a change in senior management increased speculation a take-over offer for the British insurer could be imminent.
Bid speculation also boosted shares in Morrison Supermarkets, which added 1.7 percent. Traders cited market rumours the supermarket chain could be a bid target, as take-out talk heated up in the food retail sector.
Bid talk circulated around food retailers after a deadline was set for a private consortium to make an offer for Sainsbury, and French billionaire Bernard Arnault took a 9.1 percent stake in Carrefour with US private equity group Colony Capital. Marks & Spencer added 2.6 percent, Tesco was up 1.1 percent, but Sainsbury slipped 1.3 percent.
Also on the upside, Severn Trent rose 2 percent and Kelda Group gained 2.5 percent after Merrill Lynch upgraded the two utility companies to "buy" from "neutral".
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