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Utility stocks were in demand today after EDF's sale of its UK electricity networks arm sparked hopes of renewed appetite for British assets.
The better-than-anticipated £5.8 billion price, paid by a consortium headed by Asia's wealthiest businessman Li Ka-Shing, sent the sector surging as investors speculated on which was most likely to attract takeover interest.
United Utilities topped the Footsie winners list, surging 21½p to 582p, while National Grid rose 10p to 520½p and Severn Trent advanced 28p to 1308p. On the mid-tier, water and sewerage handler Pennon Group rose 11½p to 589p, while Northumbrian Water, long mooted as a company likely to attract a suitor, was up 4.7p at 334.6p.
Shares in London were on the slide, however, with the FTSE 100 index shedding 24.85 points to 5289.1. Volumes were light in morning trading as investors waited for the US GDP figures for direction.
Drug maker Shire fell 27p to 1462p amid concerns over the side-effects of its attention deficit hyperactivity disorder treatments, from which it generates around a third of revenues.
Parents and the US Food and Drug Administration are fretting about the risks of cardiovascular problems, prompting Bernstein Research to cut its rating on Shire's shares from buy to hold.
“The absolute risk levels in children are extremely low, with a small handful of fatal or life-threatening cardiovascular events per 100,000 patient years,” said analyst Jack Scannell.
“We continue to believe that things should be OK for the stimulants. However, we remain worried by the small chance of a very bad outcome and wonder if the risk is being partly ignored, rather than priced in.” Bernstein said it was uncomfortable recommending the shares until either the results of FDA-sponsored studies are known or parental anxieties reduce. Shire delivers results next week.
The market may be moribund, but Dignity is still alive and thriving. The funeral homes and crematoria owner jumped 5½p to 687½p after it delivered a jump in half-year sales and profits. Its interim divi was up 10% at 4.4p.
Trinity Mirror shot up 8¼p to 108¼p after Goldman Sachs gave the newspapers publisher the thumbs-up following its results yesterday. The City big-hitter has increased its price target from 119p to 125p.
Also on the FTSE 250, Laird jumped 2p to 122p as UBS upped its price target for the shares to 145p following yesterday's strong results. The supplier of electromagnetic shields for laptops and mobiles is seen by some in the City as a likely candidate to attract interest from private equity.
Record results from India-focused metals group Vedanta Resources weren't enough to shield the mining sector as the dollar strengthened.
Vedanta, which has incurred the wrath of human rights organisations, fell 29p to 2450p. Rio Tinto lost 60p to 3295p, BHP Billiton sank 35p to 1942½p and Xstrata dropped 19p to 1013p.
