London Clings Onto Gains

Ivaylo
25 Sep, 2006
New York City

Initial weakness across mining stocks and a surprise placing in Wolseley held the benchmark index up on Monday, offsetting gains in the pharma sector. SSL International drew the attention in London on Monday amid talk of a imminent takeover approach. The company rose on speculation that Procter & Gamble of the US was about to table a bid. The FTSE was 7.9 points higher at 5,830.2 by mid-day on Monday.

[R]9:30AM London stocks in positive territory, pharma higher, SSl in focus.[/R]
The FTSE was slightly higher by mid-day on Monday. The benchmark was 7.9 points higher at 5,830.2.

Advancers

Shire Pharmaceuticals was the leading blue-chip gainer as UCB of Belgium agreed to buy Schwarz Pharma of Germany. Shire rose 2.4%. GlaxoSmithKline added 0.35 and AstraZeneca gained 0.4%. Hanson, the building materials group, gained 1.2% as takeover rumours refused to die down.

Weekend reports of an imminent package of cost cutting measures at Compass Group, the contract caterer, helped its shares rise 3.3%.

Decliners

With crude falling below $60 a barrel for the first time in six months, oil stocks were weaker. BP fell 0.9%. Other commodity stocks also lost ground. Vedanta Resources shed 4.9%. Icap lost 0.65 as the inter-dealer broker confirmed it had held takeover talks with the London Stock Exchange. The discussions have since been terminated.

Wolseley lost 5.3% as the plumbing goods supplier announced it would place 59 million shares to fund its aggressive acquisitions programme.

Corporate news

Wolseley on Monday posted a tenth consecutive year of record results, but shares in the plumbing and building materials group dipped after it announced plans to sell new shares to help fund acquisitions.

Toiletries and cleaning products maker PZ Cussons cleaned up today as the group announced results for the first quarter are in line with budget.