Market Report: Arm shares dip as Intel enters smartphone battle

The battle between Arm Holdings and Intel looks like it is heating up. Normally used to taking market share from its rivals, Arm was left deep in the red last night by the news that Intel is about to give the chipmaker a taste of its own medicine and take it on in the burgeoning smartphone market.

Punters in the group woke yesterday to find out that Intel had announced it was teaming up with both Motorola and Lenovo to produce the first smartphones using its chips, as well as tablets.

The revelation, made at the Consumer Electronics Show in Las Vegas, means Arm will face competition in an area where it is currently dominant. As a result, it was left 15.5p weaker at 588.5p, with Liberum Capital calling the developments a "significant" negative.

Analysts from the broker added that although they expected Intel to take no more than 10 per cent of market share, "we do not think even such a loss is factored into Arm's share price".

One factor that has helped Arm in the past has been the regular recurrence of chatter that it could be snapped up by its major customer, Apple. Yesterday, however, wild and vague speculation emerged claiming the world's largest company could be interested in a possible move for ITV.

The X Factor broadcaster is a frequent subject of takeover chatter, and the latest revival also saw it being linked yet again with a potential approach from private equity or Simon Cowell.

Yet although rumours of possible interest from Apple was widely played down by traders, one City voice argued that while an acquisition of ITV would represent a huge departure in strategy for Apple, it may not be as far-fetched as it might seem.

He also noted, rather dryly, that at least it would stop any problems with the name of the television platform Apple is believed to be working on, which it has supposedly called the iTV.

The reheated rumours saw ITV charge up 1.95p to 73.75p, with it also being helped by Panmure Gordon's Alex DeGroote. The analyst said he remained "very bullish" on the group and raised his price target to 95p, claiming it was "badly mispriced".

With nervousness building ahead of the Spanish and Italian bond auctions being held today and tomorrow, the FTSE 100 slipped back 25.88 points to 5,670.82. The mood was hardly calmed by comments from Fitch Ratings that the European Central Bank must increase the amount of eurozone debt it is buying in order to stop a "cataclysmic" euro collapse.

Rumours of a possible downgrade of France's sovereign debt did the rounds again, although they were being denied. It didn't hold the banks back as Lloyds and Royal Bank of Scotland rose 0.86p to 28.17p and 0.66p to 21.79p respectively.

Man Group was leading the Footsie down as investors continued to abandon the world's largest listed hedge fund. It has lost nearly 19 per cent over the past six sessions with the company pegged back 3.8p to 104.5p yesterday, despite Investec's Arun Melmane trying to calm fears over its dividend.

A drop in heating bills may be good news for most people, but the prospect was given a chilly reception by SSE.

The utility powered down 37p to 1,264p after EDF announced it was slashing its gas prices by 5 per cent, resulting in fears it – as well as Centrica (down 3.7p to 283.8p) – will have to follow suit.

After being buoyed by vague takeover speculation on Tuesday, Aviva climbed a further 8.3p to 315.3p despite reports that China's Ping An – the latest possible bidder suggested by market gossips – denied it was interested.

The pressure on bosses at Reed Elsevier to start disposals was turned up a notch as Bernstein claimed a break-up of the publishing giant, whose titles include New Scientist, "could release significant value". Yet although the broker's analysts calculated that a sale of the group's Reed Business and LexisNexis units may add as much as £2.3bn to its market cap, Reed failed to move from 517.5p.

Down on the FTSE 250, traders were suggesting Inchcape could be in for a good run, and JP Morgan Cazenove agreed.

The heavyweight broker said the car dealer's recent fall had provided "an excellent buying opportunity", as the company advanced 3.5p to 303.6p.

Angel Mining was flying up on AIM after announcing that it had made its largest-ever single pour of gold.

The penny stock jumped 15.84 per cent to 2.92p as it revealed it had poured nearly 520 ounces of gold doré in one go . This is a major step, claimed the digger, towards its goal of producing as much as 2,000 ounces a month.

After Gulf Keystone Petroleum jumped over 20 per cent on Tuesday on yet more bid rumours, the punters' favourite eased back 6.5p to 260.25p.

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