Footsie slumps after falls on US and Asian markets

The Footsie index of 100 leading stocks is following the lead of Asian and US markets by posting heavy losses in early trading.

The index is down 85.6 points following an hour's trading to stand at 5528.4.

Gloom over the state of the technology sector had pushed the Dow Jones Industrial Average in the US, as well as the Nikkei index in Tokyo and the Hang Seng in Hong Kong, into negative territory.

New economy stocks are again feeling the pressure on this side of the Atlantic, with telecom equipment company Marconi down 9% or 32p at 341p.

Other fallers include Colt Telecom, off 66p at 758p; software group Misys, down 42p at 495p; and chip designer ARM Holdings, down 21¾p at 294p.

The handful of stocks on the increase include Marks & Spencer after the retailer announced details of a radical restructuring plan.

While M&S announced details of 4,390 job cuts, the majority of them in mainland Europe, the City was eager to discover how the company plans to turn around its fortunes.

Analysts have responded positively to M&S's plans to close its European stores and its Direct catalogue business, and shares in the company have lifted by 7% or 17¾p to 266¾p.

The retailer is joined at the top of the Footsie leaders board by Shire Pharmaceuticals.

Its share price has lifted by 70p to £11.70 despite saying its proposed merger with Canadian company BioChem Pharma will be delayed due to regulatory difficulties.