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Leading shares are on the slide again as the healthcare sector was hit by news that a US bid for Shire may not go ahead.
But the continuing decline in the oil price has once more benefited travel and transport companies, thanks to the prospect of lower fuel costs.
Recently hit by worries about how the spread of the Ebola virus would hit the sector, British Airways owner International Airlines Group has recovered another 10.5p to 350.1p and easyJet is up 45p at £14.07 as Brent crude lost another 1.2% to $83.99. Meanwhile Tui Travel has added 10.1p to 347.7p and cruise company Carnival is 56p better at £22.69.
The oil price is falling as the evidence mounts of a slowdown in the global economy and thus lower demand for crude.
But if travel companies are doing well as a result, oil companies are clearly not. Tullow Oil is 13p lower at 505.5p while Royal Dutch Shell A shares are down 43.5p at 2130.5p.
However the main negative influence on the markets is the news that US group AbbVie said it was reconsidering its $55bn bid for Shire. Part of the reason for the deal was the benefit to AbbVie of relocating to Europe to get the benefit of lower tax rates. But plans by the US government to clamp down on this so-called tax inversion has meant AbbVie has cooled on the idea.
Shire shares are down £13.13 or 25% to £38.27, while AstraZeneca - which was in the sights of Pfizer partly for similar tax reasons - is down 144p to 4262.5p. Smith and Nephew, also seen as a possible US target, has fallen 27p to 947p.
The three have knocked around 46 points of the FTSE 100, helping to push it 71.52 points lower to 6321.16.
Meawhile the usual concerns remain to worry investors - a slowdown in the global economy, with the latest weak Chinese inflation data added to the theme, Hong Kong protests, the Ebola situation and the troubles in the Middle East.
News that UK unemployment had fallen more than expected did little to revive the market.
One UK company which could fall to a US predator is CSR, up 200.5p at 859p. Qualcomm has trumped US rival Microchip Technology - which recently issued a warning which knocked back the chip sector - to buy the bluetooth specialist. Qualcomm has agreed to pay 900p a share for CSR, which had been in talks with Microchip having earlier rebuffed its first approaches.
Analysts at Jefferies said:
With a firm price now in the open we can’t rule out other bidders but only a handful of semiconductor companies could compete with Qualcomm on this, in our view.
