UK stocks continue declines, Severn Trent lead the way
UK stocks continue declines, Severn Trent lead the way
The FTSE 100 encountered its third successive day of declines today as the take over bid for Severn Trent fell through, the Greek state run broadcaster (ERT) was closed and speculation as to the central bank’s next move regarding monetary stimulus continued.
The closure of ERT was perhaps one the biggest news story of the day and the the most unexpected. As we have previously mentioned, this could quite easily have been brushed off by investors but with so much uncertainty currently surrounding the markets and the likelihood of further stimulus fading, investors were in an extremely sensitive mood.
Severn Trent PLC fell by 8.8% as the deadline for any potential takeovers passed. The utility company’s shareholders had been holding out for a bid of £23.00 per share, which never materialized. Vodafone PLC also fell by 5.73% on takeover speculation, however this time round they were the potential buyers. Vodafone have been eyeing up a move for Kabel Deutschland Holding AG for some time, finally making their official approach today. The mobile telecommunications provider saw their stock plummet as news of the move spread.
Heritage Oil PLC added 4.6% after announcing that it had resolved issues at one of its oil fields in Nigeria which had resulted in below par production. BSkyB climbed 1.4% as Espirito Santo said that they expected another bid in the near future from News Corp, a subsidiary of BSkyB for publishing rights.
Credit Suisse Group AG encouraged a 1.4% rally from BT Group PLC after raising its expectations from the stock, suggesting a price increase from 300p to 350p should be expected in the near future. The broker went on to reiterate its longstanding “outperform” label for the company, citing its ability to cut costs — which won’t come as a surprise to many of our readers. We said BT could and would slash their overheads back in January, despite Merrill Lynch suggesting it could be a negative move.
The overall FTSE 100, London’s blue-chip benchmark, was down 40.63 points, or 0.64%, closing at 6,299.45 — with the 6930 mark it threatened to break a mere three weeks ago being little more than a memory.
