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BSkyB shares dip on deal speculation

BSkyB's confirmation of a possible £8 billion swoop for 21st Century Fox's Sky Italia and Sky Deutschland stakes left its shares more than 2% lower today.

The purchase should give BSkyB the power to sell services and compete for rights across three key European territories, but the potential cost weighed on its share price, with the blue-chip at the top of the FTSE 100 fallers board.

The top flight was 30.4 points higher at 6844.1 after a record finish to last week for Wall Street's Dow Jones Industrial Average and a good session for commodity stocks.

Miners benefited from a shot in the arm from broker JP Morgan, which upgraded its recommendation on the sector after being "underweight" on the industry for more than two years.

With the City firm buoyed by signs of a rebound in activity in China, Rio Tinto rose 127p to 3315.5p, Antofagasta lifted 20.75p to 789.75p and BHP Billiton cheered 46.5p to 1943p.

On the fallers board, BSkyB was 21.75p lower at 868.25p after Investec Securities warned that Sky Italia and Sky Deutschland were weaker businesses than BSkyB and so initially might dilute the UK firm's share price in the short-term.

However, the brokerage said the deal would bring welcome scale to BSkyB's business over the long term.

As well as BSkyB's decline, BT shares were impacted by the potential threat of increased competition from its pay-TV rival. BT fell 7.70p to 374.8p, while ITV was 2.1p lower at 186.9p during a tough session for the media sector.

In corporate news, shares in outsourcing firm Capita made headway after it said it made a strong start to the year, with £1.1 billion of new sales including contracts with Transport for London, John Lewis and the Ministry of Defence.

With its bid pipeline now standing at £5.5 billion, shares lifted 11p to 1113p.

Outside the top flight, Superdry owner SuperGroup continued its slide from last week after it warned its full-year profits will be at the low end of expectations.

The FTSE 250 company has shaken investors due to fears the downgrade may reflect stock management issues, which has blighted the company before.

The stock was the biggest faller on the FTSE 250 Index, slipping 8% or 95p to 1030p and meaning it has lost around 40% of its value since the start of April.

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