London shares close just off intra-day lows hit by financials, 'old economy'

Leading shares in London closed just off their intra-day lows after another erratic performance, with weakness in financial and 'old economy' issues preying upon early gains in the technology, telecom and media sectors - still buoyed by strong pre-weekend gains on the Nasdaq - dealers said.

Wall Street offered little direction to rudderless investors, with sentiment there knocked by profit warnings from benchmark stocks Texas Instruments and Procter & Gamble in early deals.

By the close of trade in London, however, hopes for another unexpected rate cut by the Fed had pushed the street higher again.

The FTSE 100 index closed down 27.0 points at 5,916.7, well below its 6,003.5 early morning high.

The broader indices were mixed, with the techMark adding a further 47.09 points to 2342.75.

Volume in London remained a modest 1.14 billion shares in 86,123 transactions.

On Wall Street, the DJIA was trading 52 points higher at 10,494.67, while the Nasdaq index was trading up around 21 points at 2,283.44.

Leading shares opened higher this morning, beginning another results-dominated week strongly, helped by an impressive pre-weekend rally on Nasdaq, with investors speculating that the tech-laden index could have reached a near-term bottom.

See-saw midmorning trade saw little change, with tech and telecoms continuing to stage an impressive rebound - but with underlying sentiment towards the two remaining extremely nervous - though they resumed their upward trend towards midday.

Texas Instruments warned in early afternoon that results for the first quarter will be 20% lower than the fourth quarter.

The group also lowered operating margins and widened its falling sales forecast to 20% from 10 for the first quarter - while Procter & Gamble warned that the Turkish lira crisis will erode its second-half profits.

Telecom and tech stocks continued to dominate the FTSE 100 advancers list at close, with selected bulls hopeful that last week's dramatic shake-out on the tech-laden Nasdaq index could signal the near-term bottom.

Anglo-Dutch group CMG remained a leading riser at the close, adding 80 pence at 770, as brokers were positive about the stock's attractions after in-line full-year results and soothing noises on its telecoms arm.

ABN Amro repeated its 'buy' advice and £14 price target, with Merrill Lynch rating the stock an 'accumulate' and Dresdner Kleinwort Benson an outright buyer.

But Williams de Broe remains sceptical, reiterating its 'sell' advice.

Other techs and telecoms issues continued to push higher, led by Telewest, 10 higher at 129.

Market heavyweight Vodafone was still a winner, up 4-1/4 at 188-3/4, as the market mulled talk that it is about to hike its stake in Japan Telecom at a cost of up to £1bn.

Energis gained 16-1/2 at 458 and Colt Telecom - tipped by Goldman Sachs this morning - rose 30 at 1,338.

Marconi added 27 to 511-1/2 as Schroder Salomon Smith Barney repeated its 'buy' advice, though the broker has reduced its share price target to 750p from 1,100p. Spirent was also in demand, 19-1/2 higher at 399.

In the pure tech plays, ARM Holdings gained 17-1/2 to 352, while Logica added 97 to 1,420, Misys firmed 24 to 620 and Dimension rose 13 to 423.

HSBC, however remained on offer, heading the blue chip fallers as it lost 72 to 955 as analysts downgraded forecasts after full year results towards the bottom end of market expectations.

But more worryingly, HSBC was also cautious on current year trading, warning of the wider implications of any U.S. slowdown.

HSBC Securities, the bank's own broker, is set to trim its estimates, with UBS Warburg and SG Securities making similar moves.

Shares in Standard Chartered fell back in sympathy, losing 5 at 1,040 - despite encouraging weekend press talk that the bank may seek a secondary listing in the U.S.

But Schroder Salomon Smith Barney was a fan of the bank, repeating its 'outperform' and hiking its price target to 1,125 pence from 1,040 pence.

HSBC's caution sent a shiver though the rest of the banking sector, as did the ongoing uncertainty about the fate of Abbey National and mortgage rate war fears.

Royal Bank of Scotland, due to report figures later this week, was a noticeable loser, down 32 at 1,528. Barclays lost 76 to 2,136, Bank of Scotland lost 1-1/2 at 730 - even Abbey National reversed earlier gains to fall 3 at 1,100, with the markets still awaiting further takeover moves.

Hanson shed 9-1/2 at 440-1/2 on news that Dresndner Kleinwort Wasserstein has cut its stance on the group to 'add' from 'buy'; the brokerage is also believed to have cut its pretax estimates for 2001 by 6% and by 5% for the following year. Merrill Lynch reiterated its 'neutral' stance on the stock.

On the second line, technology issues put on a strong showing midafternoon, with London Bridge Software adding 22-1/2 at 335 after finalising the acquisition of Phoenix International.

Baltimore shares added 14-1/2 at 261, Amerindo gained 2-1/2 at 48, BATM firmed 6 at 110 and Embalze - formerly known as GEO Interactive - added 15 at 352-1/2.

FKI posted further gains, firming 32-1/2 at 385, after its £120 million turbogenerators orders.

Bunzl rose 4 to 450-1/2 after better-than-expected results for the full year and positive noises on current trading in its core areas. The business support services group unveiled pretax profit of £173.4m, against a prior £150.5m. WestLB used the opportunity to upgrade its recommendation to 'strong buy' from 'buy'.

Shares in Arena Leisure plunged over 7%, losing 7-1/2 at 96, as investors became increasingly concerned at the prospect that upcoming race meetings - notably at Cheltenham - will be severely affected by the outbreak of foot and mouth disease; if the outbreak fails to be contained shortly, the fear is that overseas horses will not be able to compete in the U.K.

Scoot.com slid back 3 to 55, with news of a mobile voice access deal with Itineris and an indirect sales channel agreement with SFR failing to inspire.