The FTSE100 is currently down 64.9 points at 5,697.2 the FTSE250 is down 147.7 points at 9,204.2 and the FTSE Smallcaps is down 27.8 points at 3,410.5.

Volume is ok, with 169 million BAA shares being traded so far today.


All the US indices suffered a very bad session on Wall Street last night, as fears over high oil prices sent shock waves that the Federal Reserve will keep lifting interest rates to contain price increases.


The DJIA closed 199.15 points down at 11,048.72, while the Nasdaq dropped 49.79 points to 2,169.62.


Fed Chairman Ben Bernanke told an international monetary conference in Washington

while rising energy costs have helped slow the pace of economic growth, core inflation, excluding energy and food, was near the central bank's tolerance level and could warrant further rate tightening

Looking ahead to Wall Street, spread bettors IG Index expects the DJIA to open around 49 points lower at 1,1097, recovering some of Monday's 199 point plunge to 11,048.70.


Also overnight in Asia, the Nikkei closed 283.45 points down at 15,384.86, the Hang Seng was 146.48 points lower at 15,869.75 at midday.


Crude oil prices were a touch lower today on an apparent easing of tensions in the Iranian nuclear dispute, which has been a key driver of prices this year. July-dated Brent contracts were up 13 cents at $71.50, after advancing 34 cents to close at $71.37 yesterday. July-dated US light crude futures were up 20 cents at $72.81.


Today’s look at individual Stocks:


BAA remains the main feature today spread right across all the news boards. The stock is currently climbing 21p to 949p as the airports operator stepped closer to concluding its takeover saga. The consortium led by Spain's Grupo Ferrovial declared late this morning that it has purchased 150 million shares in BAA at 950.25p per share, a stake of 13.9%.
Earlier, the Ferrovial consortium, Airport Development and Investment (ADI) confirmed BAA had agreed to its 950.25p a share offer, valuing for the owner of Heathrow, Gatwick and Stansted at £10.11 billion. The stake purchase will make it harder for a counter bidder to gain control of BAA now. A rival consortium led by Goldman Sachs yesterday proposed a 'fully financed' 955.25p offer for BAA and now has until June 16th to announce a firm intention to make a bid.


Also in the M&A activity field this morning, shares in both Alliance Unichem and Boots Group pushed higher as the final documents for the two chemists groups planned merger were posted to shareholders today. Alliance Unichem shares are currently up 19p at 969p, while Boots shares are up 2p at 738.5p.


Severn Trent shares moved into positive territory this morning, gaining 21p at 1,178p, after the UK utility posted an in-line set of full-year results and gave further details regarding the disposal of Biffa. In reaction to this news, Citigroup reiterated its buy recommendation and 1,325p target, arguing that the group reported results broadly in line with both its estimates and the market's expectations.


Other utilities were also higher, with Centrica up 0.75p at 275p, National Grid up 1.5p at 612.5p and Scottish & Southern Energy up 1p at 1,139p.


Other than that, over 90% of the FTSE100 companies remain in negative territory this morning, with miners among the biggest fallers.


The sector was hit by sharp falls in commodity prices over night amid concerns over US interest rates and the health of the world's largest economy, which is not looking to good at all. BHP Billiton shares are down 41p at 998p. Antofagasta shares are down 78p at 1,971p and Rio Tinto shares are down 101p to 2,771p.


Xstrata shares are down 75p to 1,984p, after Inco announced last night that it has begun talks with an unnamed third party with a view to countering a hostile takeover bid by Teck Cominco. Teck Cominco offered $17.8 billion for Inco last month, provided Inco dropped its friendly bid for Canadian rival Falconbridge. Xstrata last month made a hostile $16 billion bid for Falconbridge, in which the UK-listed firm already owns a near 20% stake.



Carphone Warehouse shares are up this morning 8.75p at 340.25p, after its full year results came in line with estimates. Credit Suisse reiterated it’s outperform rating on Carphone's shares. Pre-tax profit for the year to April 1st 2006 rose to £136.1 million from £100.4 million the previous year, and slightly ahead of the £135 million stg average analysts' forecast. Revenue rose to £3.03 billion from £2.35 billion, while earnings per share rose 33.8% to 12.3p from 9.2p a year earlier.