FTSE shares close slightly lower

END-OF-DAY REPORT: Shares closed modestly higher, as miners rallied and engineers found friends, with M&A chatter driving Invensys to the top of the leaderboard and Rolls-Royce heading down again.

At the close of business, the FTSE100 was up 23.54 points at 5,820.41 with the FTST250 ahead 56.71 points at 10,923.2 and the FTSE Smallcaps 5.98 points higher at 3,041.48.

NEW YORK

US stocks made modest gains in late morning trade after a better-than-expected rise in October retail sales.

Approaching the close in London, the Dow Jones Industrial Average was up 46 points at 11,239, the S&P500 rose 4 points at 1,203 and the Nasdaq Composite gained 3 points at 2,521.

LONDON MARKETS

M&A chatter drove the market higher today, with process control specialist Invensys the biggest beneficiary on reports of bid interest from China; denied by the company. The stock was raised to accumulate from reduce at Charles Stanley. Invensys topped the blue chip leaderboard, jumping 29.1p at 347.9p.

Engineering groups also found favour, with industrial pump maker Weir Group up 61p at 1,706p, GKN ahead 4.1p at 180p and Smiths Group 12p better at 1,195p.

Mining shares recovered from an early slump, trading positively by midday. Platinum producer Lonmin led the sector with a gain of 71p at 1,838p after reporting an operating profit of $203m year to end-September, compared to a loss of $142m the previous year and re-commencing dividends. Lonmin was also helped by an upgrade to neutral from underweight at JP Morgan, with the target price raised to 2,100p from 1,550p.

BHP Billiton added 43.5p at 2,406p after confirming it has quit the battle to buy Canada’s Potash Corporation. Elsewhere, Anglo American rose 24p at 3,036p and Rio Tinto gained 15.5p at 4,329.5p.

Builders’ merchant group Wolseley ticked up 10p at 1,761p following weekend press reports that it is to sell off its Bathstore business.

BP edged rose 2.75p at 448.7p on news it has sold its African fuels marketing business to Puma Energy for $296m in cash.

Tullow Oil rose 17p at 1,253p after announcing an oil discovery in the Mercury-1 exploration well offshore Sierra Leone operated by Anadarko Petroleum Corporation the operator and in which Tullow is a 10% partner.

An upbeat trading update from Serco Group sent it 8.5p higher at 571.5p. Serco said at the end of the first half-year, it had an order book of £16.7bn. The group was also aided by being raised to hold from reduce at Numis.

In the financial sphere, banks struggled to make progress, with concerns over exposure in Ireland creating nervousness amongst investors. Barclays ticked up 1.95p at 282.45p, while Royal Bank of Scotland edged up 0.41p at 42.32p and Lloyds rose 0.3p at 69.87p.

Other notable gainers included Marks & Spencer, ahead 10.7p at 403.9p, product tester Intertek, up 42p at 1,959p, and British Airways, 3.41p higher at 270.4p.

On the downside, Rolls-Royce slumped to the foot of the ladder, down 14p at 597p, on renewed concerns over the recent Trent 900 engine failures.

Selected insurers were under pressure, with Legal & General the poor relation, off 0.75p at 99.35p and Prudential slipping 1.5p at 623p.

Pharmaceutical stocks were on offer, their defensive qualities losing attraction, with GlaxoSmithKline down 1p at 1,222p and AstraZeneca 20.5p lower at 3,016p, while prosthetics maker Smith & Nephew fell 4.5p at 589.5p.