BAE Systems hammering drags host of stocks lower

TROUBLED defence contractor BAE Systems saw nearly £830 million wiped from its market value yesterday after taking yet another hammering in the City.

Investors vented their frustrations at yesterday’s shock warning of delays to two of its major projects and sent it tumbling 27p to 104p.

BAE’s fall matched a 20% slide yesterday and pulled a host of engineering stocks lower in another depressing day in the City.

Despite relatively strong US retail sales figures, the FTSE 100 Index ended the session 39.6 points down at 3935.3.

The banking sector also suffered on continued concerns about bad debts, although the Footsie pulled back from its earlier low of 3916.0.

Peter Cogliatti, trader at Williams de Broe, said that a slow recovery was likely with morale low in the City.

“BAE was pretty dramatic, not in terms of the overall FTSE, but it’s lost 30 points after 30 yesterday and it looks pretty horrific.”

BAE’s market value has plunged from almost £5.5 billion at the start of the week to just £3.2 billion and its pain was being felt elsewhere.

The biggest blue-chip risers were Corus, up 1p at 27.75p, Amvescap, up 14.75p at 429.75p, Severn Trent, up 20p at 679p and Johnson Matthey, up 20.5p at 801p.

The heaviest fallers were BAE Systems, down 27p at 104p, Invensys, down 3.25p at 55.25p, Abbey National, down 28p at 520p and Schroders NV, off 20p at 455p.