THE FTSE 100 index enjoyed its second consecutive winning session yesterday on news of a £5 billion takeover move in the mining sector.
Platinum firm Lonmin soared 48 per cent higher after an unsolicited takeover approach from Xstrata, wh
ich added to higher gold prices to buoy fellow mining stocks.
Heavily-weighted oil majors were also advancing after Tuesday's falls, which helped the Footsie lift 31.6 points to 5,486.1.
The gains came on top of the 2.5 per cent rally in the previous session after oil prices fell to $118 a barrel. Oil fell further after yesterday's close on news of an unexpected rise in crude supplies.
Lonmin was the top share riser, up 1,107p at 3,426p following Xstrata's interest, labelled "unwelcome" by the target. Henk Potts, equity strategist at Barclays Stockbrokers, said: "From a corporate perspective, expectations of organic growth will be harder to find and, therefore, increasingly companies will be looking to merger and acquisition activity to replace that."
But it was a poor session for media, insurance and property firms, with the mood soured by half-year results and a gloomy outlook from commercial broadcaster ITV. Shares in the firm fell 2.7p to 43.6p after a 28 per cent fall in half-year profits. ITV also cut its dividend by 50 per cent and forecast a deterioration in advertising revenues for the rest of 2008.
The impact was felt in the FTSE 250 index, with Trinity Mirror down 12.25p at 122p and directories firm Yell 2p lower at 89.75p.
Back in the top flight, Old Mutual shares fell 12.1p to 94.3p after South Africa's largest insurer blamed volatile equity markets for increased provisions, offsetting a 3 per cent rise in operating profits. The firm was the Footsie's worst performer.
Financials were also hit by news from across the Atlantic of worse-than-expected numbers from struggling US mortgage giant Freddie Mac. Lloyds TSB was down 10.25p at 314.25p as banks gave back some of yesterday's gains.
Edinburgh-based Standard Life was also under pressure, despite reporting a 51 per cent rise in half-year profits and increasing its dividend payment by 7 per cent. Shares fell 1p to 243.25p during a difficult session for the insurance sector, with Aviva down 13p lower at 518.5p.
Property firms featured prominently on the fallers' board after Liberty International reported a further 7.4 per cent fall in its investment property values during the first half of 2008. Liberty, which slipped 70p to 900p, warned of further falls to come and said underlying profits had declined from £69m to £57m in the first half. Rivals also took a hit, with Hammerson off 28p at 989p and British Land down 21.5p at 737p.
Department store chain Debenhams was enjoying better fortunes as market rumours of a possible takeover bid from Icelandic investment group Baugur continued to swirl, lifting the group 7.75p to 57.5p.
The full article contains 517 words and appears in The Scotsman newspaper.
