Takeover talk fails to lift FTSE

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The FTSE 100 Index dropped 8 points to 5800

Takeover talk surrounding a raft of blue chip stocks was not enough to offset the impact of a stronger dollar on commodity shares as the London market edged lower.

The FTSE 100 Index dropped 8 points to 5,800 after the strong greenback saw energy and metal prices slide, sending heavily-weighted miners lower.

Kazakhmys was down 20p at 1534p, Rio Tinto off 47p at 4458p and Eurasian Natural Resources fell 9.5p to 935p.

Traders piled into fashion house Burberry as bid rumours resurfaced following Tuesday’s British Fashion Awards, with US designer Coach mooted as a potential interested party. Shares were up more than 4% at 1175p.

There was similar interest in medical devices firm Smith & Nephew, which sat more than 5% higher at the top of the risers board, after reports cited an 800p per share cash offer from a US consortium of private equity players. But investors were not impressed by ongoing in-fighting between shareholders at Lakeside owner Capital Shopping Centres.

The group shot to the top of the fallers board after takeover suitor and major investor Simon Property said it will vote against Capital’s planned acquisition of Manchester’s Trafford shopping mall.

It added it was still interested in buying Capital, but threatened to drop any potential offer unless it was allowed to carry out due diligence. Shares in Capital fell 4%, or 15.5p, to 392.5p.

Corporate earnings provided the focus in the FTSE 250, with Comet parent Kesa Electricals dropping 0.1p to 171.8p after it reported a three-fold increase in UK half-year losses as second quarter sales slumped 10%.

Comet saw losses widen to 6.4 million euros (£5.4 million) in the six months to October 31 up from 1.8 million euros (£1.5 million) a year ago.

Shares in video games and consoles retailer Game Group plunged 6% as it warned profit margins would be hit as it runs more promotions to reverse falling sales. Game said like-for-like sales in the UK and Ireland were down 7.6% in the 18 weeks to December 4, compared with a 16.2% decline in the first half.

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