The FTSE 100 is fighting to recover from a poor start inflicted by mining giant Xstrata's takeover collapse, with the index currently down 31.90 points (0.56%) to 5657.20.
Vale’s planned takeover of Xstrata fell through last night after Xstrata's board reportedly knocked back a £40 per share offer. The miner is down 7.86% to 3424 so far.
The world's fifth-largest insurance group Aviva is also struggling, down 3.62% to 612.50 and corn refiner Tate & Lyle is 2.92% lower to 566.
Sainsbury’s is leading the gains after announcing a £1.2bn property joint venture with British Land. The supermarket chain is 3.57% ahead to 348.50.
Vodafone is higher following an upgrade from UBS, 3.42% higher to 157.10 and Kingfisher is 3.21% up, to 138.20.
In New York, the Dow Jones IA closed lower after poor consumer confidence and housing figures took the gloss off a solid trading day. The index fell 16.04 points (0.13%) on Tuesday, to 12532.60.
Retail giants were obviously hardest hit following the consumer figures, with Home Depot down 1.71% to 28.76 and Wal Mart 1.08% lower to 53.05.
Investors also reacted to the news of the updated Bear Stearns offer, with JP Morgan Chase falling 1.05% to 46.06.
Philip Morris parent company Altria climbed despite lingering doubt on the future of big tobacco in the US, closing 2.3% higher to 73.33.
Alcoa, world's leading producer of primary aluminium, also had a solid day at the office – up 2% to 35.74.
In Tokyo, the Nikkei 225 was lower as exporters continue to feel the pain of a strong yen against the dollar. The index fell 38.59 points (0.3%) to 12,706.63.
Meanwhile, Hong Kong’s Hang Seng index climbed 152.49 points (0.68%) to 22,617.01 and Sydney’s S&P/ASX 200 added 63 points (1.18%) to 5,381.40.
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