Shares hit new lows

Disappointment at the overnight cut in US interest rates has knocked 149.1 points off the FTSE-100 index of top companies.

It now stands at just 5497.7, its low of the session, mirroring further losses in the US markets.

The Dow Jones Industrial Average dropped to its lowest level for 2½ years after the Federal Reserve chairman Alan Greenspan lopped 50 basis points off US interest rates, rather than the 75 point cut investors hoped for.

Economists are now predicting the market could register a loss of 200 points before recovering slightly by the close of the day.

Telecom and tech stocks are the main sufferers, with Vodafone off 10¾p at 196¼p, BT 38½p lower at 484p, Colt Telecom down 101p at 764p and Cable & Wireless down 7½p at 458p.

Among the telecom equipment firms, Energis has slipped 31¼p to 289¾p and Marconi is off 23p to 366p.

Tech stocks on the slide include chip designer Arm, 20p lighter at 300p and software group CMG off 72p at 605p.

Banking stocks are also tumbling after the Competition Commission said it may even call for a tax on their profits to open up competition in providing services to small and medium-sized companies.

The Royal Bank of Scotland is off 75p at £14.47, Lloyds TSB has dropped 17p to 266p, Barclays has fallen 76p to £19.62 while HSBC has dropped 11p to 819p.

Only five Footsie stocks have risen all morning, led by mining groups Billiton.

Billiton has risen 3½p at 335½p following a report that Alcan, the world's second-largest aluminium firm, is considering making a counter bid for the group.

A move would gatecrash merger plans Billiton announced this week with Australian rival BHP.

Gas exploration business BG Group is also up, rising 1¾p at 270p, after being upgraded by stockbroker Lehman Brothers.