The FTSE 100 is slightly up with gains of 2.3 points, or 0.04%, to 5,509.5, as tobacco stocks have fallen on a ratings downgrade but property stocks including British Land have risen following a report that Abu Dhabi's royal family may buy one of the company's property portfolios.
Tobacco stocks have weighed on the benchmark, with British American Tobacco falling 13p, or 1.02%, to 1,262p, while Gallaher has dropped 4.5p, or 0.51%, to 882.5p, after Lehman Brothers cut its recommendations on both stocks.
But British Land is performing well with gains of 11.5p, or 1.18%, to 990p, after reports the Abu Dhabi royal family may buy a portfolio that includes Plantation Place in London's financial district.
Elsewhere, Liberty International has gained 5p, or 0.52%, to 974.5p, while Hammerson has added 1.5p, or 0.16%, to 962.5p. But Land Securities is not off to such a good start with a loss of 9p, or 0.58%, 1,548p.
Severn Trent is also down 31p, or 2.88%, to 1,044p, as it is trading without the right to the latest dividend payout.
Meanwhile, Marks & Spencer is one of the top gainers, advancing 5.75p, or 1.2%, to 483.75p, helped by a fairly hefty price target increase from Credit Suisse First Boston.
In Japan the Nikkei 225 Stock Average sank 314.28 points, or 2%, to 15,464.58 at its close a short time ago, as stocks slid from five-year highs after the dollar slumped against the yen and a survey of confidence among large manufacturers disappointed some investors.
The Tankan business confidence index climbed to 21 in the fourth quarter from 19 in the third, as deflation abates in the world's second-largest economy higher than economists expectations.
Mizuho, Japan's second-largest bank, declined 17,000 yen, or 1.8%, to 935,000, while Sumitomo Mitsui Financial Group, the third-largest bank in Japan, declined 30,000 yen, or 2.4%, to 1.22 million. Mitsubishi UFJ Financial Group, the world's largest lender, also fell 10,000 yen, or 0.6, to 1.64 million.
Elsewhere, Toyota, the world's biggest carmaker by market value, lost 100 yen, or 1.7%, to 5,800, while Honda Motor, which is the most dependent on US sales among Japan's top three carmakers, lost 140 yen, or 2%, to 6,760.
Amongst other exporters, Sony, the world's second- biggest consumer electronics maker, sank 110 yen, or 2.4%, to 4,390, while Canon, the world's largest maker of copiers, slipped 120 yen, or 1.7%, to 7,000.
J-Com also resumed trading today, after trading of shares in the employment placement company was suspended after a sell order error at Mizuho Securities on the stock's debut. The price of the shares was set at 912,000 yen each, and the stock surged by the daily limit set by the exchange to 1.02 million yen.
In the US, the Dow Jones Industrial Average rose 55.95 points, or 0.52%, to end at 10,823.72, after the Federal Reserve boosted interest rates but hinted that its rate-increase campaign is nearing an end, soothing concerns about rising borrowing costs for companies and consumers.
The US central bank's rate-setting Federal Open Market Committee voted unanimously to lift the benchmark federal funds rate by a quarter-percentage point to 4.25%, the highest level since April 2001, for the Fed's 13th straight rate increase.
Shares of Citigroup gained 1.6%, or $0.76, to end at $49.44, while Bank of America's stock rose 1.7%, or $0.76, to $46.50.
Procter & Gamble, the maker of Crest toothpaste and Tide detergent, rose 2.8% to $58.51 to give the Dow its biggest boost, as it said its quarterly earnings and sales should come in toward the top end of its previous targets.
Elsewhere, Altria Group rose 2.1%, or $1.52, to end at $74.03, after news that the Illinois Supreme Court will issue a long-awaited ruling in a key tobacco case. Shares of Pfizer, also performed well, with gains of 6.5%, or $1.37, to end at $22.31.
Taser International also rose 15%, or $0.92, to $7.04, after it said US securities regulators ended an investigation into its statements on the safety of its stun guns and an accounting issue with no recommendation for further action.
But Microsoft ended down 1.2%, or about $0.32, to close at $27.13, after a survey showed that Microsoft sold less than half of the estimated 159,000 Xbox 360 video game consoles that were available in stores in Japan in the first weekend of sales.
Meanwhile, Intel rose 0.4%, or $0.10, to end at $26.72, while Micron Technology added 0.3%, or just $0.04, to end at $13.84, as US antitrust regulators said late Tuesday they had approved a joint venture by Intel and Micron to make flash memory chips.IFAonline
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