London shares closed lower on Wednesday as market heavyweight Vodafone dropped back following a denial that a takeover bid for the telecoms giant is in the offing.
The benchmark FTSE 100 index shed 70.38 points or 1.08 percent to 6,420.28 points, losing most of Tuesday’s gains.
The market was also affected by investors taking profits from the previous day’s technical spike, dealers said.
“Yesterday’s gains came in spite of a slew of poor economic data,” said Chris Beauchamp, market analyst at IG trading group. “In a neat reversal, today we are seeing a modest pullback.”
Vodafone’s share price sank 5.85 pence or 3.05 percent to 186 pence after Verizon distanced itself from press speculation regarding a potential merger with the British group.
“As Verizon has said many times, it would be a willing purchaser of the 45 percent stake that Vodafone holds in Verizon Wireless,” the US company said in a statement.
“It does not, however, currently have any intention to merge with or make an offer for Vodafone, whether alone or in conjunction with others,” Verizon said in a statement filed with the Securities and Exchange Commission.
Shares in the UK mobile phone group had jumped 2.9 percent on Tuesday, swelling their 2013 rise to 20 percent, amid various media reports that Verizon was mulling a joint attack with AT&T to divide up Vodafone’s assets.
State-rescued Royal Bank of Scotland shed 4.44 percent to 271.10 pence as thousands of investors launched a potential £4.0 billion claim against the bank and its old bosses over a controversial 2008 shares sale conducted just before its state bailout.
The RBOS Shareholder Action Group — comprising more than 12,000 private shareholders and over 100 institutional investors — announced the legal action in a statement which argued that they had all lost money in a rights issue that misrepresented the bank’s health.
Former top management — including ex-chief executive Fred Goodwin and former chairman Tom McKillop — are also being sued.
Royal Bank of Scotland declined to comment on the matter.
London-listed insurance companies took a pounding on Wednesday, with Standard Life plunging 6.45 percent and RSA dropping 5.43 percent to 111.40 pence.
Evraz fell 6.0 percent to 203.50 percent in the wake of the steel producer’s announcement on Tuesday that it is buying a 51 percent stake in Russian iron ore development Timir for 4.95 bn roubles or about $160 mn.
Total investments in the first phase of the Timir project are estimated to reach $1.8 billion by 2018, Evraz said.
Fellow metals group ENRC dropped 4.55 percent to 224.60 pence.
The few modest gainers included energy services specialist Wood Group, up 1.74 percent to 879.50 pence, and India-focussed resources giant Vedanta, up 1.71 percent at 879.50 pence.
On the currency markets sterling rose against the dollar to $1.5136 at 5:31 pm from $1.5117 on Tuesday evening and strengthened slightly against the euro to 1.1790 euros from 1.1776 euros the previous night.
London shares close lower as Vodafone bid denied
