Bid talk pushes Dana higher as FTSE 100 loses its grip

A retreat in miners and banks offset strength in defensive utilities and food retailers yesterday, pushing the FTSE 100 lower by 0.7 per cent lower, ending four consecutive sessions of gains.<br /><br />The index closed 36.74 points lower at 5,345.93, giving back some gains from the previous session when shares hit a 14-month closing high.<br /><br />Mid-cap <strong>Dana Petroleum</strong> was buoyed in morning trading as speculation swirled around the market of an imminent bid from <strong>BP</strong> at 1,700p to 1,800p per share. The stock rose as high as 1,330p, from its opening price of 1,266p, before closing 2 per cent up at &pound;12.93 after an approach failed to materialise.<br /><br />Mining stocks were under pressure as metals prices fell off their recent highs after the dollar recovered from previous losses. <strong>Anglo American, Eurasian Natural Resources, Lonmin </strong>and<strong> Xstrata</strong> shed between 1.6 to 3.3 per cent.<br /><br />&ldquo;Today we&rsquo;re seeing a bit of a realisation that yesterday we may have gone a bit too far,&rdquo; said Angus Campbell, head of sales at Capital Spreads.<br /><br />&ldquo;Confidence is very much apparent but we have to see whether these levels can be sustained,&rdquo; he added. <br /><br />The banking sector was led lower by falls in heavyweight <strong>HSBC</strong>, which shed 2.1 per cent, while <strong>Barclays</strong> and <strong>Standard Chartered </strong>lost 2.8 and 1.6 per cent.<br />Prominent US analyst Meredith Whitney&rsquo;s bearish comments on banks also hit the sector. <br /><br />Bucking its weaker peers, part-nationalised <strong>Lloyds Banking Group </strong>and<strong> Royal Bank of Scotland </strong>added 0.6 and 0.9 per cent respectively.<br /><br />Big banks stepped up warnings that tightening capital rules too soon could stall economic recovery, but policymakers said the bailed out sector cannot rely on taxpayers again in future. <br /><br />Among individual fallers, insurance-focused takeover vehicle <strong>Resolution</strong> lost 3.3 per cent on concerns over a potential rights issue to fund the company&rsquo;s next acquisition.<br /><br /><strong>Intertek</strong> slipped 2.8 per cent after the testing and inspections group posted a 28 per cent rise in revenue for the 10-month period but said the rate of organic revenue growth was slowing. A ratings downgrade to &ldquo;outperform&rdquo; from &ldquo;buy&rdquo; by Seymour Pierce also weighed on the stock. <br /><br />As risk appetite waned, defensive utility stocks found some support. <strong>Centrica</strong> added 1.7 per cent as gas prices recovered from a decline last week. <strong>Severn Trent, </strong>and<strong> United Utilities</strong> put on 1 and 0.8 per cent respectively.<br /><br />Defensive supermarket chains <strong>WM Morrisson, Sainsbury </strong>and<strong> Tesco</strong> were up 0.4 to 1.2 per cent.<br /><br /><strong>Cable &amp; Wireless </strong>was up 1.7 per cent after the telecoms group said it planned to raise around &pound;200m via the bond market as part of a refinancing to push through a demerger by April next year. <br /><br /><strong>ICAP</strong>, the world&rsquo;s biggest interdealer broker, rose 3.2 per cent after reporting first-half results, with Numis upgrading the stock to &ldquo;hold&rdquo; from &ldquo;reduce&rdquo; as revenues beat its expectations, while profit fell just short of forecasts.