LONDON (ShareCast) - Weakness in the real estate sector left London nursing losses, but the deficit could’ve been worse had it not been for recovering oil issues and M&A speculation.

Stocks had tumbled following a brief improvement in early deals as traders considered a big slide in China and a new two-year low at GlaxoSmithKline.

Negative comments in the press and recent concerns about its diabetes drug Avandia continue to plague the drug major, although the shares ended just a touch lower.

Imperial Tobacco fell on talk it may up its €47 offer for Spain’s Altadis to €52 before recovering in afternoon trade.

Real estate giant Hammerson lost some of its recent gains inspired by hopes of a bid from British Land. Meanwhile, Segro, formerly Slough Estates, said it will sell its life sciences real estate business in the US to Health Care Property Investors for £1.5bn, but the shares dropped in line with the sector.

After the deduction of tax and various other costs, the net cash proceeds receivable will be approximately £574m, of which £250m will be returned to shareholders via a special dividend. The remainder will be used to reduce debt, it said.

But oil majors were better as crude prices neared $66 a barrel in New York, having jumped more than a dollar Friday on Iran and Nigeria concerns. BP and Royal Dutch Shell gained.

Royal Bank of Scotland was among the best performers on newspaper rumours suggesting it has put Southern Water up for sale for about £4bn, while financial information provider Reuters advanced as Lehman lifted its target to 660p

Mobile phone titan Vodafone had helped limit losses on talk that the index heavyweight may attract a break-up bid, but it failed to hold gains. HSBC upgraded its price target to 200p from 170p.

Miners were mostly lower, with Xstrata and Kazakhmys losing out, while Anglo American, which papers suggested will be approached by French firm Lafarge to sell its Tarmac division, was also down.

Leisure group Whitbread has conditionally agreed to sell its David Lloyd Leisure business to London & Regional Holdings Limited and Bank of Scotland Corporate for £925m.

Elsewhere, project management firm AMEC said it has sold its Property Developments and Building and Civil Engineering units to Morgan Sindall.

Oil and gas group Soco International hit a new record best after reporting oil and gas shows at the Te Giac Den well in Vietnam.

Electronic components manufacturer Acal said annual pre-tax profit rose 14% as demand for its electronics and IT solutions products increased. Pre-tax profit from ongoing activities rose to £9.8m in the year ended 31 March, while sales for the year increased 1.5% to £260.9m.

Flooring and fabric specialist Low & Bonar said first half trading is in line with company expectations as it continues to grow from acquisitions.

Alpha Airports has agreed to the terms of an 110p per share cash offer from Italian firm AutoGrill, valuing the airport retailer and flight caterer at about £193.6m.

Timber distribution firm James Latham said trading for the year to 31st March 2007 is ahead of market expectations.

Theo Fennell was in demand after the upmarket jewellery manufacturer said full-year profit before tax and exceptional items more than doubled, helped by record Christmas trading and successful new collections.

FTSE 100 - Risers
Shire (SHP) 1,192.00p +1.19%
Royal Bank of Scotland (RBS) 638.00p +0.95%
Reuters Group (RTR) 642.75p +0.78%
BSkyB (BSY) 663.00p +0.68%
Royal Dutch Shell 'A' (RDSA) 1,916.00p +0.63%
Royal Dutch Shell 'B' (RDSB) 1,947.00p +0.57%
Barclays (BARC) 732.50p +0.55%
Imperial Tobacco (IMT) 2,230.00p +0.54%
BP (BP.) 570.50p +0.53%

FTSE 100 - Fallers
Reed Elsevier (REL) 678.00p -1.67%
Hammerson (HMSO) 1,588.00p -1.67%
Land Securities (LAND) 1,919.00p -1.64%
British Land (BLND) 1,436.00p -1.64%
Lonmin (LMI) 3,967.00p -1.59%
Liberty International (LII) 1,206.00p -1.47%
Tate & Lyle (TATE) 589.50p -1.34%
Persimmon (PSN) 1,354.00p -1.31%
Drax (DRX) 776.00p -1.27%

FTSE 250 - Risers
Soco International (SIA) 1,832.00p +18.88%
Morgan Sindall (MGNS) 1,500.00p +13.21%
QinetiQ Group (QQ.) 205.50p +3.27%
Hochschild Mining PLC Ord 50p (WI) (HOC) 315.00p +2.86%
Spirent (SPT) 77.75p +2.30%
Avis Europe (AVE) 61.00p +2.09%
Kier Group (KIE) 2,402.00p +2.04%
Mapeley (MAY) 3,433.00p +1.87%
Southern Cross Healthcare (SCHE) 534.00p +1.62%

FTSE 250 - Fallers
Findel (FDL) 740.00p -3.58%
easyJet (EZJ) 563.00p -3.01%
Euromoney Institutional Investor (ERM) 658.50p -2.95%
Barratt Developments (BDEV) 1,064.00p -2.83%
Debenhams (DEB) 132.50p -2.75%
Grainger (GRI) 625.50p -2.65%
Inmarsat (ISAT) 406.75p -2.63%
Topps Tiles (TPT) 245.75p -2.58%
Northgate Information Solutions (NIS) 79.00p -2.47%

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