Quiet day for Footsie ahead of US interest rate decision

The Footsie 100 index is enjoying a rare quiet start as investors turn their attention to tomorrow's crucial interest rate decision in the US.

By mid-morning, the index is hovering around its opening price, off by 6.9 points after initially surging back above the 5600 barrier in early trading. It now stands at 5555.9

New economy stocks are again weighing on the market, reflecting the continuing pessimism in the market about high-tech shares and the global economy.

Economists are praying that US Federal Reserve chairman Alan Greenspan will take action tomorrow to kick-start the American economy by cutting 0.75 basis points from interest rates. The Nasdaq is expected to open slightly up this afternoon, which could help to stem losses on this side of the Atlantic.

In London trading this morning, computer services group Logica is down more than 6% or 74p at £10.77. Fellow computer services group Dimension Data has fallen by 12p to 340p; while Misys is off 30p at 530p; and Sage is down 5½p to 254½p.

Among the telecoms, Energis has tumbled nearly 7% or 23½p at 325½p; ahead of Colt Telecom, down 50p at 845p. Telewest is also falling again, down 4p to 116p, despite securing a £2.25 billion debt restructuring deal.

BT is also on the slide, down 10p at 495p, after hinting it may be willing to accept a debt rating downgrade. Analysts say this will make a rights issue to shareholders less likely.

Of the stocks heading in the opposite direction, mining company Billiton's confirmation that it will be merging with Australian rival BHP in a £20 billion deal has been enough to push it to the top of Footsie risers board. Its share are up by 13% or 37½p to 328p.

The news has inspired investors to seek out shares in rival mining firms, with Rio Tinto up 25p at £12, while Anglo American is up 71p at £41.75.

In a light day for corporate results, furniture retailer and manufacturer MFI is off slightly despite reporting a 55% jump in full year pre-tax profits. Its shares have dropped by ½p to 99p, with analysts explaining its £45.4 million profits were slightly below their expectations.