Market Report: BSkyB tipped to sell off stake in ITV to RTL

Speculation about the future of BSkyB's 17.4 per cent stake in ITV reached fever pitch yesterday on rumours that the satellite broadcaster is on the verge of selling out to RTL, which in turn could make a bid for ITV.

However, some traders believe that a deal is yet to be done for a couple of reasons: firstly, that the Competition Commission is still investigating the original acquisition and Alistair Darling would have to sanction the sale in writing; secondly, although more than 92 million ITV shares changed hands, BSkyB owns more than 600 million - clearly if any deal had been struck the volume would have been significantly higher. That does not mean that a deal will not happen - BSkyB paid 135p for its stake and assuming it can engineer an exit for something approaching that price BSkyB would take it. ITV rallied 7.1p to 121.7p in early deals before closing 4.5p better at 119.1p, while BSkyB added 5.5p to 640p.

A mining sector review by the French broker SG Securities resulted in downgrades for Rio Tinto and BHP Billiton. SG told clients that there is no need for either mining giant to turn "aggressively" to corporate action, but clearly the market thinks otherwise. Rio Tinto, rated a "sell" by SG, topped the blue chip leaderboard with a 145p gain to 3,675p, while BHP Billiton added 12p to close at 1,194p.

Man Group was short on buying support ahead of next week's full-year numbers, despite a bullish note from Dresdner Kleinwort. The German bank believes that the float of its brokerage unit Man Financial could raise $5.1bn (£2.57bn) and it raised its target price for the shares to 650p. Even so, sellers had the upper hand and the stock closed 5.5p worse at 581p.

It was another quiet session in London, with very few significant moves in the blue chips. Weakness in the property and the non-banking financial sectors was offset by a bounce in the miners, and with little direction coming from New York the FTSE 100 closed marginally better, up 5.1 at 6570.5.

ComputaCenter topped the list of mid cap fallers after broker Goldman Sachs initiated coverage of the stock with a "sell" recommendation. That said, the broker set a price target of 250p, just 4.5p below yesterday's opening price and by the close the shares had fallen 14.25p to 240.25p. The stock is well below Goldman's target price but traders are not holding their breath for a "buy" note.

Inmarsat, the satellite communications group, is viewed by traders as one of the most expensive stocks in the mid market. Its senior management obviously agrees; they sold more than 1.9 million shares at 420p. The chief executive, Andrew Sukawaty, cashed in on 800,000 shares while finance director, Rick Medlock, sold 350,000, sending the shares 10.25p worse to 407.5p.

House building stocks came in for a bout of profit taking on unfulfilled consolidation hopes and interest rate fears. Bellway fell 47p to 1,439p with blue chip rival Persimmon off 21p to 1,346p. Merger partners George Wimpey and Taylor Woodrow failed to avoid the selling pressure, and fell 11p to 619.5p and 15p to 460p respectively.

Insurer Admiral Group, 16p better at 994p. was in focus again. Earlier in the week traders had been speculating that the group has received bid approaches but yesterday the company confirmed that it is mulling the sale of its online insurance price comparison unit, confused.com, with traders speculating that the unit could fetch up to £700m.

Perhaps it is a good thing that shares in Betex, the China-based software group, are still suspended. The company yesterday announced the resignation of its chief executive, Peter Greenhill, and finance director, Stuart Barker, after failing to win assurances from authorities that they will be able to travel in China "unhindered". The stock was suspended in mid-April after two senior managers were arrested.

Two new listings were heading in opposite directions. Roxi Petroleum, which came to the market on Monday, added 4.75p to 48p as blue chip institutions Lehman Brothers, Credit Suisse and JP Morgan all increased their stakes in the Kazhakstan-focused oil and gas explorer. Meanwhile, Blinkx, the consumer search engine demerged from Autonomy on Wednesday, fell another 3p to 47p, just 2p above its listing price.

The disaster of the day was SMC Group, after the architectural and design company made its third warning of the year. The shares had been on an outstanding run until January, adding almost 300 per cent from their June 2005 listing price. However, the warnings have eaten up all of those gains and the stock tanked 36.5p to close at 47p.