FTSE 100 loses 64 points after reaching five-year high

FTSE 100 loses 64 points after reaching five-year high

	Published : Tue, 28 Mar 2006 09:25 By : James Rowe Print this Story

LONDON: Speculation is rife in the City that mortgage lender Alliance & Leicester is being eyed by a foreign firm. According to reports, the bank had spurned an offer in the range of 1,300 pence and 1,400 pence a share from a foreign buyer, which some sources believe is French bank Credit Agricole.

Though Alliance & Leicester denied any such move, its share prices went up 10 pence to a record 1,168 pence with some 8.7 million shares changing hands.

Barring this, the stock market remained rather weak Monday as financial stocks fell amid lacklustre performance. Analysts say the FTSE 100 will see a period of consolidation now after an unprecedented surge in the last few months. The benchmark index closed 64.1 points, or 1.1 per cent, lower at 5,972.2 points, having risen earlier to 6,047 -- its highest level since March 2001.

Global investors are exercising caution as the U.S. Federal Reserve's monetary policy statement is due for release Tuesday and many expect some hints on the interest rates in the U.S.

The U.S. indices, the Dow Jones and S&P 500, are trading lower ahead of the Fed release.

In Britain, banks contributed about 15 points to FTSE losses. Other financial stocks such as Royal & Sun Alliance slipped in part on uncertainty over bid speculation in the sector. Fund managers Amvescap and Schroders fell 2.2 and 2.7 per cent respectively as a weaker dollar also weighed, according to traders. Oil and gas shares too tended to be weak as U.S. crude oil prices fell below $64 a barrel. Mining shares were trading at lower rates.

Only eight of the top 100 companies showed any improvement in the prices. Among those to gain ground was BSkyB to 546.5 pence, because of talks of a sector consolidation, and WPP to 699 pence, as a result of positive comments from UBS.

Among mid-cap shares, Associated British Ports rose 3 per cent to 717 pence after a newspaper reported about a bid by a consortium for 740 pence-a-share. The names of Canada's Borealis and Spanish firm Ferrovial are being mentioned in this regard.

Babcock International gained 3.7 per cent amid reports of a counter bid for the firm against the offer from shipbuilder VT Group and defence company BAE Systems.