Market Report: Setback in the US brings Inmarsat down to earth

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Inmarsat finished as one of the blue-chip index's major fallers last night after worries over a set-back for an ambitious project which aims to create a wireless network that will operate across the US.

The mobile satellite group is involved in a spectrum co-operation agreement with LightSquared, the US telecom group behind the high-speed network, which will result in it receiving $115m (£72m) a year.

However, the National Telecommunications and Information Administration has now said it has "significant interference concerns" over proposed alterations to the service, and the government agency urged the Federal Communications Commission in a letter to delay a key decision on whether to modify LightSquared's licence.

Analysts said it was bad news for Inmarsat, which slid back 15.5p to 638.5p. Morgan Stanley suggested that the delay means the payments are "less likely in the near term".

The broker commented that it "adds to the uncertainties already in place" around the project, adding that its previous "estimate of a full $115m in revenue contribution from LightSquared in 2011 now appears too optimistic".

Overall, the FTSE 100 lost 21.81 points to end the week at 6,002.07. In what has become a recurring theme, efforts by China to curb its inflation resulted in the miners suffering over fears of a drop in demand, as the country's central bank increased reserve requirements for lenders.

Fresnillo finished in last place on the top-tier index, down 66p to 1,492p, despite it revealing that last year had seen its highest production of gold and silver.

Arm Holdings continued its blistering start to 2011, in which its share price has already surged by more than 25 per cent, increasing by 26.5p to 530.5p. The chip maker's latest rise was prompted by Intel – often talked about as a potential bidder – announcing that 2010 was its best ever year.

Cambridge-based Arm was also given a helping hand by Compal, as the Taiwanese company, which produces notebook computers, predicted that it will ship about 3.42 million tablets this year with Arm's technology inside it.

Early action left Smith & Nephew, a popular subject among market gossips, as one of the biggest gainers following reports that it is about to begin discussions with the US group Biomet over a potential merger.

However, S&N denied during trading that it was "in any discussions which could lead to a merger or a takeover involving the company", and the replacement knee and hip manufacturer instantly lost its momentum, finishing with a small rise of 0.5p at 685p.

BAE Systems was up 4.1p to 346.7p following its announcement that it had agreed a €217m (£182m) takeover of the Irish group Norkom, a financial security specialist. Although Investec said it seemed "expensive", its analysts added that the deal was "highly complementary to BAE's Detica NetReveal" software, which is used to fight counter-terrorism and tax fraud.

ITV climbed 3p to 77.4p, leaving it near the summit of the FTSE 250, as JP Morgan Cazenove expressed its positive stance on the free-to-air television sector and reiterated its view of the broadcaster as a "top pick".

The broker said that the rise of the internet and an increase in digital channels had not had as large an effect on advertising as expected and, looking ahead, that it is "too early to see any negative impact from ... internet operators entering the TV space".

There was a boost of 90p to 1,380p for Spectris after its latest update. The engineer said an improvement in trading at the end of 2010 meant that its full-year profit should see a large rise, prompting Arbuthnot Securities to raise its advice to "buy".

Elsewhere, many of the housebuilders were doing well as the Council of Mortgage Lenders released steady home loan figures for November. Bank of America Merrill Lynch reiterated its "overweight" advice on the sector, and Bovis (which issued a trading statement) and Redrow finished as the biggest risers, up 12p to 437.2p and 2.7p to 130.1p respectively.

The small-cap company AGA Rangemaster, manufacturer of the middle classes' favourite cooker, shot up nearly 15 per cent following its pre-close update. The group rose 15.25p to 117.25p after it said it expected its full-year trading to meet expectations.

Espírito Santo Investment Bank's Sanjay Vidyarthi confirmed his "buy" advice, saying he feels "increasingly confident about the impact of various self-help measures to drive growth in the core business even in a difficult macro environment".

On the Alternative Investment Market, Bowleven made a modest move of 5.5p to 391p after Barclays Capital chose it as its top pick for 2011 among the exploration companies. The broker said its "new Miocene play could provide a sweet ... surprise" and that the group offers "the highest upside" in the sector.

FTSE 100 Risers

British American Tobacco 2,366.5p (up 41.5p, 1.78 per cent)

Gains despite Ugandan unit saying 2,000 tonnes of tobacco have been destroyed in a fire.

Hammerson 436.1p (up 1.5p, 0.35 per cent)

Moves up even though Goldman Sachs removes it from its "conviction buy" list.

National Grid 531p (up 1p, 0.19 per cent)

Small increase as trade unions warn pay dispute could start to harm its operations.

FTSE 100 Fallers

British Airways 294.7p (down 4.8p, 1.6 per cent)

Falls as Iberia, with whom it is merging, says its passenger load factor dropped year-on-year.

Scottish & Southern 1,199p (down 14p, 1.15 per cent)

Reveals that two offshore wind farms in which it has stakes have started generating power.

SABMiller 2,166.5p (down 14.5p, 0.66 per cent)

Drinks company retreats ahead of third-quarter trading statement next Tuesday.

FTSE 250 Risers

SuperGroup 1,494p (up 59p, 4.11 per cent)

Good performance completes successful week for retailer after Wednesday's trading statement.

Morgan Crucible 272.8p (up 5.2p, 1.94 per cent)

Announces £6.15m deal to buy Chinese graphite group Changsha Hairong New Materials.

Dixons Retail 21.7p (up 0.35p, 1.64 per cent)

Electronics chain gains despite UBS, Société Générale and Nomura cutting its price target.

FTSE 250 Fallers

Afren 157p (down 4.7p, 2.91 per cent)

Closes among the mid-tier index's major losers after Oriel downgrades its advice to "hold".

Ashtead 161p (down 4.3p, 2.59 per cent)

Cut by Numis Securities to "hold" over its bid approach, revealed Thursday, for Lavendon.

Meggitt 374.9p (down 2.8p, 0.74 per cent)

Edges backwards following UBS' decision to reduce its recommendation to "neutral".

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