THURSDAY MARKET CLOSE: M&A still the main game on the FTSE

Smith & Nephew continued its rise as London traders shrugged off the eurozone’s latest stimulus package to concentrate on takeover chatter.

The wider market rallied slightly as the European Central Bank unveiled its package of measures. Picture: Getty

The shares gained a further 24p at 1,088p amid reports that a second US firm, Medtronic, was eying up the medical kit maker. A dream scenario of £15 a share was mentioned.

Jonathan Jackson, head of equities at Killik & Co, said: “Medtronic could utilise its $14 billion (£8.3bn) cash pile, most of which resides outside the US. With Stryker recently declaring an interest, we could be set for a competitive situation.”

The wider market rallied slightly as the European Central Bank unveiled its package of measures, but then drifted lower again. The benchmark FTSE 100 Index closed down 5.14 points at 6,813.49, although its peers on the continent were more enthusiastic – France’s CAC 40 and Spain’s IBEX 35 were both up more than 1 per cent.

Housebuilder Persimmon was the biggest faller in the FTSE 100 after the Halifax recorded the strongest monthly uplift in house prices since 2002, fuelling expectations that the Bank of England will take steps to cool the current property boom.

Shares fell more than 5 per cent or 70p to 1,262p. But FTSE 250 rival Bellway was 31p higher at 1,436p after it reported an 11 per cent rise in its weekly reservation rate.

Clothes retailers were out of favour after Aim-quoted Asos issued its second profits warning in three months. Asos shares slumped by as much as 40 per cent at one stage, although they recovered a little to close 31 per cent or 1,403p lower at 3,120p.

Primark-owner Associated British Foods fell 14p to 3,034p and Next declined 5p to 6,640p. Outside the top flight, Asos rival Boohoo.com fell 4.5p to 45p and SuperGroup dipped 12p to 1,098p.