Market Report: Shire falls from grace as takeover talk goes quiet

As the blue-chip index dropped to its lowest level for five weeks, Shire was among the stocks in the red with the pharmaceutical company weakened by ailing takeover hopes.

Bid talk has been a constant presence around the group for a while now, helped by the perceived attractiveness of its drugs portfolio, and vague speculation suggesting Germany's Bayer could make a possible move emerged last month.

The chitter-chatter has helped Shire's share price to shoot up nearly 40 per cent over the past year, but yesterday it was pegged back 73p to 2,026p after JP Morgan dismissed the rumours as "improbable".

"[Shire's] current valuation includes some bid speculation, which we believe is unlikely to be realised," said the broker, which downgraded its rating to "neutral". The analysts cited the group's recent rise as another reason behind them removing their support for the stock, saying there were few events in the near future likely to drive it up further.

Collins Stewart's Emmanuel Papadakis added to the bearish mood around Shire, reiterating his "sell" advice following the group's update last week. Its second-quarter figures may have come in ahead of forecasts, but Mr Papadakis said "questions remain", with the analyst noting concerns over – among other issues – "declining HIV royalties, increased operating expense guidance, and continued disappointment from launch products".

As bond yields for both Italy and Spain reached their highest level since the euro's launch, growing fears over the state of the eurozone – and yet more poor economic data from the US – meant the FTSE 100 fell by 56.04 points to 5,718.39, its lowest since June.

Despite becoming the second bank this week to positively surprise with its interim results, Barclays finished narrowly behind, creeping down 0.25p to 216.75p.

Meanwhile, HSBC was still advancing in the wake of its figures on Monday, climbing 2.6p to 610.1p even though Royal Bank of Scotland's analysts cut their advice to "hold" and warned it "remains heavily dependent on economic conditions in the US and Europe".

Hargreaves Lansdown was left with the top-tier index's wooden spoon as the wealth manager plummeted 73.5p to 506.5p – a move of nearly 13 per cent. Investors were reacting to the Financial Services Authority's statement on Monday that it was planning to prevent payments from investment managers to platform providers, such as Hargreaves, although the company itself insisted that the new changes "will result in no material impact on our business".

A number of the water companies improved after Northumbrian Water – which shot up by 20.1p to 469.5p on the FTSE 250 – agreed to Cheung Kong Infrastructure Holdings' 465p-a-share takeover approach.

The sector has been a deep source of takeover speculation in recent months, and Severn Trent, one of the most frequent names mentioned in bid gossip, ticked up 35p to 1,451p while its fellow blue-chip peer United Utilities was lifted 6.5p to 591p.

In the wider utility sector, National Grid was also higher as it powered up 12p to 602.5p. The group was helped by Liberum Capital's analysts choosing it as one of the broker's top stocks, praising its defensive qualities and adding that "the company could create significant value for shareholders through a demerger of the US business."

They were much less keen on Cable & Wireless Communications, however, warning that the mid-tier telecommunications group – which yesterday jumped down 1.37p to 35.49p – could see its share price halve thanks in part to its poor cashflow, despite already losing over a quarter since its full-year results in May.

Still, the most dramatic fall of the day came from Centamin Egypt, which had 20 per cent of its stock wiped out after cutting its production expectations. The gold miner slipped back by 28.2p to 109.6p as it blamed blast restrictions, leaving it at its lowest level for 18 months.

Enterprise Inns was nursing its sorrows, declining 3.45p to 50.3p after UBS reduced its price target to 60p from 80p, warning investors that it currently looks set to be demoted to the small-cap index at the next indices reshuffle.

Its peer Punch Taverns was knocked back 0.71p to 12.29p on its last day on the FTSE 250 in the wake of spinning-off Spirit Pub Company at the start of the week. Spirit, meanwhile, slid 5p to 50p, meaning that combined they are now lower than Punch's closing price on Friday before the break-up of 63.55p.

Down on the Alternative Investment Market, Bowleven retreated 46.5p to 178.5p after Matrix's Charlie Sharp responded to the West Africa-focused explorer's drilling update on Monday by downgrading his rating to "reduce" from "buy", saying "the potential upside now looks less enticing".

Suggested Topics
Life and Style
Small winemakers say the restriction makes it hard to sell overseas
food + drink
Arts and Entertainment
A comedy show alumni who has gone on to be a big star, Jon Stewart
tvRival television sketch shows vie for influential alumni
Arts and Entertainment
Carrie Hope Fletcher
booksFirst video bloggers conquered YouTube. Now they want us to buy their books
News
Clare Balding
peopleClare Balding on how women's football is shaking up sport
PROMOTED VIDEO
Sport
Lewis Hamtilon and pole-sitter Nico Rosberg
SportShould F1's most aggressive driver curb his instincts in title decider?
Arts and Entertainment
Damien Hirst
artCoalition's anti-culture policy and cuts in local authority spending to blame, says academic
Sport
premier leagueMatch report: Arsenal 1 Man United 2
Arts and Entertainment
Kirk Cameron is begging his Facebook fans to give him positive reviews
film
News
i100
Sport
Jonny May scores for England
rugby unionEngland 28 Samoa 9: Wing scores twice to help England record their first win in six
Life and Style
fashionThe Christmas jumper is in fashion, but should you wear your religion on your sleeve?
News
ebooksNow available in paperback
Arts and Entertainment
Jason goes on a special mission for the queen
tvReview: Everyone loves a CGI Cyclops and the BBC's Saturday night charmer is getting epic
Arts and Entertainment
Jerry Hall (Hand out press photograph provided by jackstanley@theambassadors.com)
theatre
Sport
Tony Bellew (left) and Nathan Cleverly clash at the Echo Arena in Liverpool
boxingLate surge sees Liverpudlian move into world title contention
Voices
Neil Findlay
voicesThe vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Life and Style
food + drinkMeat-free recipes and food scandals help one growing sector
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

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible
Look what's mushrooming now! Meat-free recipes and food scandals help one growing sector

Look what's mushrooming now!

Meat-free recipes and food scandals help one growing sector
Neil Findlay is more a pink shrimp than a red firebrand

More a pink shrimp than a red firebrand

The vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Bill Granger recipes: Tenderstem broccoli omelette; Fried eggs with Mexican-style tomato and chilli sauce; Pan-fried cavolo nero with soft-boiled egg

Oeuf quake

Bill Granger's cracking egg recipes
Terry Venables: Wayne Rooney is roaring again and the world knows that England are back

Terry Venables column

Wayne Rooney is roaring again and the world knows that England are back
Michael Calvin: Abject leadership is allowing football’s age-old sores to fester

Abject leadership is allowing football’s age-old sores to fester

Those at the top are allowing the same issues to go unchallenged, says Michael Calvin