- Shareholders raise questions with terms of Glencore/Xstrata merger.
- BP predicts flat underlying production in 2012.
- Greek talks enter critical stage.

UK stocks sank further into the red by midday with worries over Greece and China - as well as an early blow to the Glencore-Xstrata merger - weighing on sentiment.

Today is another day of delays in Greece, though the end "may" be near. The Guardian's correspondent in Athens has cited government officials as saying that "there is a deal on the table and in all probability the (political) leaders will accept it". According to a "well-placed source" the leaders will receive the agreement at 16:00 and have two hours to review it before meeting with the Prime Minister, Lucas Papademos, at 18:00.

Greece needs to pass these austerity measures to receive approval on the second financing package worth €130bn before a €14.5bn bond payment comes due on March 20th. However, EU officials have marked February 15th as the deadline for the approval to go through in order to have the time necessary for the legal paperwork to be prepared.

London's shares were also being dampened by reports that the Chinese Ministry of Industry is anticipating a slowdown in the country's industrial production, as the world economy cools and the European crisis worsens.

GLENSTRATA MERGER DEALT AN EARLY BLOW

In what was hoped to be a well-received announcement that Xstrata and Glencore would tie the knot, the opening salvos have been fired in the battle for value over the proposed $90bn merger between the two commodity giants. On one side are the shareholders of Glencore and the managements of both companies (who hold large stakes in their firms). The other faction is made up of unhappy institutional shareholders in Xstrata who believe they are being sold a pup.

The all-share deal values Xstrata at £39.1bn or a premium of 28% over its average price in the three months prior to the bid. But Xstrata shareholders - such as Standard Life and Schroders - argue that the figure of 1,290p per share is only a 15% premium over the share price the day before the offer was made. It's thought they are aiming for 20% or around 1,336p per share, valuing Xstrata at around £39.54bn.

While the news has prompted speculation of a bout of consolidation in the mining sector, miners were generally out of favour with Chinese worries doing its bit to add to selling pressure. Antofagasta, ENRC, Kazahmys and Vedanta were among the worst performers.

Burberry, however, was the heaviest faller, losing nearly 4% on concerns over China. The luxury firm is often sensitive to developments in the Chinese economic outlook, as it provides it with one of its fastest-growing markets.

Oil titan BP was out of favour despite announcing a 14% increase in its quarterly dividend against a full-year replacement cost profit figure of $23,900m, compared with a loss of $4,914m in 2010. The company did warn however that underlying production would be broadly flat in 2012. However, sector peers Cairn Energy, Shell and BG Group were among the better performers tracking brent crude prices higher.

TALKTALK ON THE RISE

Internet and telephone service provider TalkTalk Telecom soared after raising full year earnings guidance as projected cost savings come in ahead of schedule. With just under two months of its financial year left to run, the company has raised full year earnings per share (EPS) guidance by 6% to a range running from 17.0p to 17.5p.

TUI Travel fell after summer 2012 bookings during the key booking month of January were little changed from last year. Nevertheless, the travel operator said it outperformed the UK leisure travel market which saw a 14% year-on-year decline in bookings. Meanwhile, fourth quarter revenue rose 5% to £2,4845m, but the underlying operating loss widened as a result of fewer French holiday-makers en vacances in North Africa.

Housebuilder Bellway slipped despite saying completed home sales rose by 5% in the six months to January 31st 2012 with operating margins poised to reach double digits.

Insurance and reinsurance company Amlin rose strongly after estimating that its worst case position resulting from the grounding of the cruise ship Costa Concordia would be less than £10m, net of reinsurance recoveries.

BC

FTSE 100 - Risers
Shire Plc (SHP) 2,237.00p +5.07%
Cairn Energy (CNE) 353.60p +2.52%
Hargreaves Lansdown (HL.) 451.90p +2.47%
Experian (EXPN) 921.00p +1.66%
British American Tobacco (BATS) 3,091.00p +0.72%
Imperial Tobacco Group (IMT) 2,425.00p +0.71%
RSA Insurance Group (RSA) 112.70p +0.62%
WPP (WPP) 780.50p +0.58%
ICAP (IAP) 385.00p +0.52%
Royal Dutch Shell 'B' (RDSB) 2,304.50p +0.52%

FTSE 100 - Fallers
Burberry Group (BRBY) 1,395.00p -3.53%
Eurasian Natural Resources Corp. (ENRC) 698.50p -3.19%
Antofagasta (ANTO) 1,321.00p -3.08%
Kazakhmys (KAZ) 1,156.00p -2.86%
Wolseley (WOS) 2,230.00p -2.53%
Vedanta Resources (VED) 1,284.00p -2.51%
Xstrata (XTA) 1,230.00p -2.50%
Randgold Resources Ltd. (RRS) 7,385.00p -2.38%
Man Group (EMG) 134.00p -2.19%
Schroders (Non-Voting) (SDRC) 1,258.00p -2.10%

FTSE 250 - Risers
TalkTalk Telecom Group (TALK) 130.80p +10.01%
Amlin (AML) 354.50p +5.07%
Spirit Pub Company (SPRT) 54.00p +2.86%
Henderson Group (HGG) 122.20p +2.26%
Greggs (GRG) 537.00p +2.19%
Exillon Energy (EXI) 266.80p +1.87%
Tullett Prebon (TLPR) 319.90p +1.85%
Shanks Group (SKS) 107.00p +1.81%
Euromoney Institutional Investor (ERM) 743.00p +1.78%
Perform Group (PER) 259.50p +1.76%

FTSE 250 - Fallers
Morgan Crucible Co (MGCR) 317.60p -4.05%
Ferrexpo (FXPO) 353.00p -3.63%
Spectris (SXS) 1,562.00p -3.58%
Misys (MSY) 323.60p -3.40%
Michael Page International (MPI) 415.60p -3.33%
Kesa Electricals (KESA) 71.55p -3.31%
Bwin.party Digital Entertainment (BPTY) 168.30p -3.28%
Bellway (BWY) 755.00p -3.27%
TUI Travel (TT.) 199.90p -3.20%
easyJet (EZJ) 457.00p -3.18%

Related share prices
BG Group (BG.) share price
BP (BP.) share price
Bellway (BWY) share price
TUI Travel (TT.) share price
Amlin (AML) share price
Antofagasta (ANTO) share price
Cairn Energy (CNE) share price
Burberry Group (BRBY) share price
Xstrata (XTA) share price
Vedanta Resources (VED) share price
Kazakhmys (KAZ) share price
Royal Dutch Shell 'A' (RDSA) share price
Royal Dutch Shell 'B' (RDSB) share price
Eurasian Natural Resources Corp. (ENRC) share price
TalkTalk Telecom Group (TALK) share price
Glencore International (GLEN) share price