UK blue chips stayed weak around midday but held off their early morning lows, supported by hopes of a recovery on Wall Street today following a savaging over the past few sessions, although much will depend on February U.S. retail sales data due at 1.30 pm, dealers said.
By 12.18 pm, the FTSE 100 index was 68.0 points lower at 5,756.8, above an earlier low of 5,746.8.
The broader FTSE indices all stayed weak, but also held off lows, with the techMARK 100 index the worst off - down 60.54 points at 2,166.83.
Trading volume was improving, with 971 million shares changing hands in 61,748 transactions.
Both S&P and Nasdaq futures were indicating an early rally in New York today, which would not be surprising given yesterday's 4% plunge from the DJIA, and the Nasdaq's finish below the 2,000 level for the first time in three years.
Today's U.S. retail sales figures may also spark a rally, with commentators pointing out that the data could be perceived as encouraging even if it comes in below or ahead of expectations - as the former would boost rate cut hopes, and the latter indicate an improvement in the U.S. economy.
Headline U.S. Feb retail sales are expected to be 0.4% higher on the month, with the core ex-autos number seen up 0.2%.
Selected telecom issues managed to hold its rally around midday after recent sharp falls, with market heavyweight Vodafone standing out, taking on 5-1/2 at 202-1/2, while BT added 9-1/2 at 543.
Shares in Colt Telecom itself remained dull, down 12 at 1,128, with the French broker upping its stance for Colt to 'reduce' from 'sell' on valuation grounds, but also proffering the switch advice. Energis also stayed dull, losing 3 at 417.
Selected technology blue chips also attracted bargain hunting on hopes of an early Nasdaq rally today.
ARM Holdings found good support, turning around from an opening fall thanks to some bargain hunting, with a gain of 6 at 308. Autonomy - soon-to-be demoted from the blue chip index - also rallied 20 at 1,225, while Marconi ticked up a penny at 447 - helped by a repetition of its 'buy' rating from Schroder Salomon.
Elsewhere on the up, blue chip insurer Prudential rallied after earlier falls as the market continued to mull yesterday's mammoth £25 billion merger move for American General Insurance. Pru gained 16 pence 788 as dealers pointed out that the stock looked 'oversold', with Deutsche Bank upping its stance to 'buy' from 'market perform'.
Fellow insurer CGNU also gained a boost from an upgrade in rating by Schroder Salomon today, to 'outperform' from 'neutral' - its shares added 7 at 942.
United Utilities remained firm, up 3-1/2 at 589-1/2, wanted for its defensive qualities, and after the group said its cost savings are being achieved ahead of plan. The firm added that it is raising its cumulative target cost savings for the five years to March 31, 2005, to £450 million from 400 million.
Meanwhile Cadbury Schweppes added 4-3/4 at 451-3/4, supported by news of an upgrade in stance by Morgan Stanley to 'outperform' from 'neutral'. Vague comments in the Financial Times' Lex column suggesting a possible deal with U.S. chocolate group Hershey.
But among the major blue chip fallers, Railtrack took over took the top slot on the FTSE 100 fallers list, shedding 73-1/2 at 774 as the market reacted to the Strategic Rail Authority's latest plans for the group.
Railtrack itself welcomed publication of the Strategic Rail Authority's Strategic Agenda, saying it "clearly endorses" the principle that Railtrack should own and operate the entire rail network.
The Financial Times newspaper today suggested that Railtrack had asked the UK government to advance £1.5 billion of funds - 50% more than previously published.
Elsewhere on the downside, Pearson remained under pressure after reports in the Daily Telegraph suggested the firm is to halve spending on its flagship web site, FT.com to calm investors fear over its internet expansion. Pearson shares shed 29 at 1,381.
Fellow media blue chip Reuters also suffered, off 7 at 980 hit by falls in its Nasdaq-listed software unit, Tibco.
Biotech issue Celltech also continued to fall, losing 60 at 1,110 reflecting the sectors' weakness in New York last night, recent negative broker comment, and uncertainties ahead of tommorrow's full year results.
Oil major Shell was also a big faller, hit by OPEC uncertainties, and after its U.S. bid target Barratt Resources signalled that it will consider the Anglo-Dutch group's $1.8 billion approach. Shell shares lost 14-1/2 at 562-1/2.
Fellow oil blue chip BP Amoco also fell back, off 13 at 576, as investors fretted over the prospects of further oil production cuts at this week's OPEC meeting.
On the second line, selected technology issues rallied after recent plunges, with bargain hunters tempted by hopes of a Nasdaq recovery today.
After recent hefty falls, Scoot.com topped the FTSE 250 gainers board, adding 2 at 29, while Kewill Systems bounced 9 higher to 197, and Bookham Technology took on 14 at 375.
But the majority of technology issues continued to feature on the FTSE 250 fallers list.
Trafficmaster was the biggest mid cap faller, losing 32-3/4 at 252-1/4 in nervous trade ahead of its full year results due tomorrow.
Biotech group Cambridge Antibody also remained a major faller, shedding 287-1/2 pence at 2,362-12, while NXT fell 50 to 447-1/2, BTG lost 102-1/2 at 1,167-1/2, and London Bridge Software eased 20 to 307-1/2.
Independent Insurance remained among the minority non-tech issues on the FTSE 250 fallers board, shedding 14-1/2 at 156-1/2 in the face of last week's wave of post-results downgrades.
Chubb also suffered, down 10-3/4 at 132-3/4 on fading bid hopes, and after disappointing full year results yesterday.
Building materials group Wolseley ran in to profit taking after reporting forecast-busting interims today. The firm posted pretax pre-exceptional profit of £167.2 million, up from 155.6 million last year, and above the 150-£160 million market range. Initial broker comment on the numbers was positive, with ABN Amro, Williams de Broe, and Teather & Greenwood all repeating 'buy'. However, Wolseley shares went in to reverse, losing 3 at 429.
But some of today's results provided chinks of light in the gloom.
Morgan Crucible advanced 3-1/2 pence to 298 after posting above-forecast full year, with pretax pre-exceptional profits rising 17% higher to £95.1 million.
Aegis was also a gainer after numbers, adding 1-1/2 at 124-1/2 with the group tagging a positive outlook statement on to its slightly below expectations full year figures.
Elsewhere, Innogy Holdings gained a boost from new of an upgrade in stance by Dresdner Kleinwort Wasserstein to 'hold' from 'reduce'. Its shares - wanted too for defensive qualities - gained 2-1/4 at 183-3/4.
Other diverse 'old economy' issues also saw some 'safe haven' buying, with Provident Financial adding 24-1/2 at at 514, Halma firming 2 at 134, WS Atkins gaining 12-1/2 at 842-1/2, and Stagecoach taking on a penny at 59-1/4.
Among small cap issues, Freeserve put in a strong technical rally, topping the gainers list with a 10-1/2 pence advance to 97-1/2 on bargain hunting given an arbitrage situation with shares in soon-to-be owner, Wannadoo of France.
Bargain hunting also provided a lift to Orange, ahead 8-1/2 at 557-1/2.
Meanwhile, NanoUniverse, up 5 at 49, was also a big gainer, supported by positive full year results today. Relyon was boosted by news the group is in talks regarding a possible cash offer for the firm from Steinhoff International. The news came as Relyon also posted encouraging full year results - in response its shares firmed 12 at 142-1/2.
Brammer remained supported by news of an upgrade in stance from HSBC Securities to 'add' from 'hold' following strong full year results - its shares gained 15 at 495.
Troubled coal operator RJB Mining rallied after recent bad news, gaining a penny at 71-3/4 after news of a five-year supply contract with British Energy.
Birmingham City continued to be lifted by hopes its football team will secure promotion to the lucrative FA Premiership this season - its shares added 1-1/2 at 32-1/2.
A pair of profit warnings continued to do the main damage to the small cap fallers.
Conder Environmental lost 3-1/2 pence at 13-1/2 - a drop over 20% in value - after the company warned that its results for the first accounting period since the demerger from Southern Vectis will fall significantly short of expectations.
Synstar, off 8-1/4 at 37-1/2, was also blighted by a full profit warning, although the group said it still expects to see year-on-year growth in the first half.