Headline shares traded higher at lunchtime after a reversal of earlier negative trade as investor confidence grew on the back of lower than expected inflation figures. At time of writing, the FTSE 100 was up 22.79 points at 5224.92 while US stock futures were pointing to a slightly higher open.
LONDON MARKETS:
BSkyB was the runaway leader on the FTSE 100 this morning, jumping up 18.65% to 712.5p following announcements that a possible 700p per share offer by News Corporation for all of British Sky Broadcasting Group (LON:BSY) would not be recommended by the satellite broadcaster's independent directors. They unanimously consider that such an offer would "undervalue significantly BSkyB". The independent directors, who have been so advised by Morgan Stanley and UBS Investment Bank, have indicated to News Corporation that they would have been prepared to support a proposal if it would deliver value in excess of 800 pence per share.
Other shares seeing gains included Intercontinental up 2.92% at 1232p, Whitbread (LON:WTB), up 2.83% at 1492p, Centrica (LON:CNA), up 2.24% at 297.3p and 3i (LON:III), up 2.12% at 298.3p
Those still in negative territory included Insamart, down 4.6% at 783p, Unitied Utilities, down 1% at 559p, Imperial Tobacco Group (LON:IMT), down 0.78% at 1897p and British American Tobacco (LON:BATS), down 0.73% at 2174.5p.
The annual rate of inflation dropped to 3.4% in May from 3.7% in April. The largest downward contribution to the change in the CPI annual rate came from food and non-alcoholic beverages where prices fell slightly between April and May but rose between the same two months a year ago. The main effects came from meat, particularly pork products, and fruit, particularly grapes. There was also a small downward effect from vegetables where prices fell this year but rose a year ago.
The price of BP(LON:BP.) shares was steady in the market during the morning session, up just over 1% to 359.2p. This follows a 9.3% fall yesterday when more than £50bn was wiped off the Company's market value as the share price dropped 36.45p to close at 355.45p. Investors took fright after the oil giant faced demands from US senators to set up a $20bn compensation fund and President Obama compared the Gulf of Mexico oil spill to the 9/11 terrorist explosions.
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