Market Report: ARM gets cold shoulder as bid rumours fade

Profit-taking weighed on the London market last night, with ARM Holdings sliding to the bottom of the FTSE 100 thanks to a combination of fading bid hopes and share sales by directors.

The chip designer was 6 per cent or 19.9p behind at 312.1p as it emerged that its chief executive, Warren East, and chief financial officer, Tim Score, had offloaded parts of their respective holdings. The disclosure followed reports that the German chip maker Infineon was close to striking a deal to sell its wireless unit, with Intel being named as the likely bidder. Alongside Apple, the American semiconductors group has been mooted as a possible bidder for ARM, but the reports suggested that its interests lie elsewhere, prompting a round of profit-taking around the London-listed firm.

Overall, the market rally ran out of steam, with the FTSE 100 closing broadly unchanged at 5,396.48, down 0.6 points, and FTSE 250 retreating to 10,135.87, down 25.3 points. The cheer inspired by HSBC's half-yearly profits faded, limiting gains for likes of Lloyds Banking Group, which was 0.5p lower at 71.92p, Barclays, 1.2p behind at 342.75p, and Royal Bank of Scotland, which fell 0.1p to 52.05p. HSBC itself was 8.6p worse off at 671.4p, but Standard Chartered bucked the trend, closing up 41p at 1,902.5p last night.

In the mining sector, commodity markets softened, leading to a mixed performance in related equities. Copper prices, for instance, backed off from three-month highs, though the view that markets may have priced in the prospects for a near-term pullback in the pace of global growth helped to cap losses. BHP Billiton, down 15p at 2,019.5p, and Kazakhmys, down 16p at 1,262p, were among the losers, but Lonmin managed to rise by 13p to 1,645p and Antofagasta was flat at 1,037p.

The British Gas owner Centrica was 11.1p better off at 321p after Goldman Sachs reiterated its "conviction buy" view while marginally upping its estimates on the back of the results. "We believe that guidance and our forecasts retain some headroom against short-term risks of higher gas prices or more aggressive tariff action by competitors," the broker said. "Despite the modest earnings upgrade, we continue to believe Centrica trades on low multiples relative to its earnings growth and more stable business model."

The pharmaceuticals group Shire was ahead, building, like Centrica, on a combination of a lower appetite for risk and some positive broker comment. The pharma group, which was 19p higher at 1,473p, also announced plans to buy Belgium's Movetis for €428m to bolster its portfolio of gastrointestinal products. Separately, Citigroup abandoned its "sell" view on the stock, upgrading the pharma group to "hold" with a revised 1,615p target price, compared to 1,425p previously.

Back on the downside, the replacement hip and knee manufacturer Smith & Nephew was 5p weaker at 561.5p following some words of caution from Morgan Stanley, whose analysts lowered the stock to "equal weight" from "overweight". The broker said that, based on second-quarter trends, it was scaling back its growth estimates owing to a "meaningful deceleration" in the reconstruction market.

Intercontinental Hotels failed to make any headway, closing flat at 1,121p despite JP Morgan Cazenove upgrading its estimates and adding the stock to its widely followed analyst focus list. "We believe the Revpar [revenue per available room] outlook remains favourable for 2011," the broker said, repeating its "overweight" view on IHG. "Expected supply growth of less than 1 per cent is well below the 10-year average of 2 per cent and the expected demand growth of 2.9 per cent."

Elsewhere, Taylor Wimpey rallied 2.58p to 31.1p after posting interim results. The stock was also boosted by JP Morgan Cazenove, whose analysts argued that the recent run of weakness across the housing sector was unjustified. "This underperformance surprises us because during July we saw profit upgrades from Barratt Developments, Berkeley and Persimmon, and Bovis Homes suggesting a return to dividends for the full year.... The national housebuilders are currently trading at an average price to last reported book [value] of 0.63 times, a 37 per cent discount to asset value," the broker said as Barratt rose by 2.3p to 103.5p. Berkeley edged up by 0.5p to 822p, Persimmon firmed up by 4.5p to 379.7p and Bovis gained 5.5p to 365.2p.

St James's Place was under pressure, ending down 0.2p at 277.5p, after Goldman switched its view to "sell", telling clients that while the wealth manager was geared for sales growth, it was "too expensive". The broker said that the strength that followed the company's interim results at the end of last month were, in its view, "primarily" down to the news that majority shareholder Lloyds had no intention of selling its stake. "St James's Place has a successful business model to raise sales, but while its appetite for growth remains, cash and shareholder dividends are likely to remain constrained," Goldman added, scaling back its target for the stock to 262p from 270p.

News
i100
News
people Emma Watson addresses celebrity nude photo leak
News
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
News
peopleHis band Survivor was due to resume touring this month
PROMOTED VIDEO
Arts and Entertainment
Robert De Niro, Martin Scorsese and DiCaprio, at an awards show in 2010
filmsAll just to promote a new casino
News
i100
News
people'It can last and it's terrifying'
News
In this photo illustration a school student eats a hamburger as part of his lunch which was brought from a fast food shop near his school, on October 5, 2005 in London, England. The British government has announced plans to remove junk food from school lunches. From September 2006, food that is high in fat, sugar or salt will be banned from meals and removed from vending machines in schools across England. The move comes in response to a campaign by celebrity TV chef Jamie Oliver to improve school meals.
science
Arts and Entertainment
tv
Life and Style
fashionModel of the moment shoots for first time with catwalk veteran
News
ebooksAn unforgettable anthology of contemporary reportage
News
i100
Sport
Tom Cleverley
footballLoan move comes 17 hours after close of transfer window
Sport
Alexis Sanchez, Radamel Falcao, Diego Costa and Mario Balotelli
footballRadamel Falcao and Diego Costa head record £835m influx
Life and Style
fashionAngelina Jolie's wedding dressed revealed
News
Boris Johnson may be manoeuvring to succeed David Cameron
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

C#.NET Developer

£500 per day: Harrington Starr: C#.NET Developer C#, WPF, WCF, ASP.NET, Prism...

Web Developer/UI Developer (HTML5, CSS3,Jquery) London

£55000 - £65000 per annum: Harrington Starr: A Global Financial Service Organi...

Data Scientist (SQL, PHP, RSPSS, CPLEX, SARS, AI) - London

£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...

C# Web Developer (C#, MS Dynamics CRM, SQL, SQl Server) London

£40000 - £50000 per annum: Harrington Starr: A Global Financial Service Organi...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering