Wood takeover talk sends shares up

LONDON FTSE 100 CLOSE 5,681.90 -138.51

SPECULATION over a possible 3 billion takeover by US engineering giant Halliburton sent shares in Wood Group higher yesterday as the Aberdeen-based oil and gas services group bucked the wider market sell-off.

Wood closed up 8.2p at a 12-month high of 486.9p following market chatter of a potential bid from the world's second-largest oil services corporation. Both companies declined to comment but one analyst said a bidder may face difficulties acquiring the family holdings.

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The broader FTSE-100 was heavily in the red following fears Ireland will need a bail out from the European Union or the International Monetary Fund.

The Footsie ended the day down 2.4 per cent or 138.51 points at 5,681.90, its lowest close since 11 August.

Will Hedden, sales trader at IG Index, said: "Equity traders are heading for the hills as concern builds once again over the health of the global economy.

"Comparing this to the 42 triple-digit falls we saw in 2008 underlines the levels of volatility that are returning, and the question many are left with is just how protracted this run lower will now be."

America's Dow Jones Industrial Average was 1.8 per cent lower at the close in London, while France's Cac 40 dropped 2.6 per cent and Germany's Dax fell 1.9 per cent.

Speculation that China will tighten monetary policy to cool inflation added to anxiety over sovereign debt crises in Ireland, Greece and Portugal.

Inflation worries also took centre stage on this side of the Atlantic, after a rise in the rate of inflation to 3.2 per cent in the UK in October.

It was also a poor day for the pound, which sunk against most major currencies, down more than 1 per cent to $1.59 and 0.6 per cent to €1.17.

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Investor sentiment was hit as Ireland came under intense European pressure to accept a massive financial bail-out - not just to rescue the Irish economy but to save the euro itself.

Royal Bank of Scotland - parent of the Ulster Bank, which is exposed to the Irish woes - saw its shares drop 3 per cent or 1.5p to 40.9p, while Lloyds lost 3.3p to 66.6p. Barclays was also down 8.7p to 273.8p.

The potential impact of action to tackle China's inflationary pressures weighed on mining stocks, with Kazakhmys down 93p at 1,421p and Antofagasta off 79p at 1,359p.

Investors were also focused on events outside the top flight after results from second-tier stocks including Taylor Wimpey and Enterprise Inns.

The housebuilder lost earlier gains to close down 0.1p to 24.8p despite saying its full-year profits were likely to be at the upper of expectations.

Taylor Wimpey also reported progress on refinancing talks with banks in a move that should free the company from some of its more onerous covenant restrictions.

Enterprise Inns was down 10.3p to 99.3p after posting a narrower-than-expected fall in full-year profits.However, analysts expressed disappointment the UK pubs giant will not be paying a dividend.

Low-cost airline EasyJet announced plans for shareholder payouts from next year, but saw its shares slip 22.8p to 449.3p after a decent run for the stock.