FTSE lower amid Portugal debt fears

0

The FTSE 100 Index was 30.7 points lower at 5953.7 by mid-session

Medical devices firm Smith & Nephew soared to the top of the FTSE 100 Index after reports of a takeover approach from US rival Johnson & Johnson.

Smith & Nephew shares leapt 12% amid speculation suggesting its suitor was considering whether to return with a higher offer after a £7 billion proposal was reportedly rejected several weeks ago.

But the wider FTSE started the week on the back foot – down 30.7 points to 5953.7 – as stocks were hit by renewed European sovereign debt concerns, with Portugal feared to be next in line to seek a bail out.

Commodity stocks also weighed on the top tier as miners came under pressure amid worries over China’s economy and moves to slow down growth. The Dow Jones Industrial Average on Wall Street was on track for a lower opening in line with falls in the UK and Europe.

But Smith & Nephew was bucking the trend in London thanks to the takeover rumours, with one analyst estimating the group could fetch £9 a share, valuing it at around £8 billion. The group’s shares raced 75.5p higher to 725.5p.

Investor attention was also focused on the retail sector after the latest updates from supermarket Morrisons and department store chain Debenhams.

Morrisons impressed analysts after reporting like-for-like festive sales growth of 1% for the six weeks to January 2, slightly better than most forecasts. Shares responded with a rise of 1.5p to 271.5p.

Debenhams dipped into negative territory, down 1.1p at 73.1p after it estimated the impact of the snow cost it up to 3% in like-for-like sales for the 19 weeks to January 8, leaving same-store sales for the period down by 1.3% excluding VAT.

Online grocery group Ocado was also in the red despite saying it had outperformed market expectations with a 26.7% leap in gross pre-Christmas sales. Shares declined 3.7p to 182.3p in the FTSE 250, although the stock is also giving back recent gains that have seen it rise to record highs since its controversial flotation last summer.

Elsewhere, Persimmon shares were up 3.3p at 441p after the housebuilder said it expected profits to be at the top end of expectations. The performance defied falls among its builder peers after the latest Halifax house price figures revealed a 1.3% fall during December, which took 2010 declines to 3.4%. Barratt Developments and Bovis Homes, which provide trading updates on Wednesday and Friday, fell 0.7p to 92.7p and 5.1p to 422.3p respectively.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.