The FTSE-100 Index ends a subdued session

The FTSE-100 Index ended a subdued session on the back foot today as traders wondered how to take the US Federal Reserve’s shock interest rate cut.

Despite the initial surge to stock markets on both sides of the Atlantic yesterday, there is a growing feeling the Federal Reserve may have acted because the

US economy will get worse.

An equally muted start to trading in the US gave investors in the UK little direction and the FTSE-100 Index closed down 18.6 points at 5871.6.

Analysts said the next key indicator will be the publication of US first quarter ross domestic product figures next week.

In London, a fall in the headline rate in inflation failed to have any impact on the market today, with stocks taking their lead early on from a profit warning issued by computer services group CMG.

The company said its Telecom software division would see lower revenues in the first half following a drop in demand for its text messaging technology.

Broker Schroder Salomon Smith Barney cut its full-year forecast for the group to £90m from £150m as a result. CMG’s share price plunged by 22%.

It recovered slightly later in the session, but it still ended the day down 19%, a fall of 83p to 360p, enough to wipe £500m from its market value.

CMG’s fall from grace was enough to drag down rival computer services group Logica, which ended the day down 5%, or 55p to 895p.

Telecoms equipment group Marconi also suffered, falling 21½p to 343½p.

Other new economy stocks weathered the storm, continuing to benefit from the recent recovery in the tech-laden Nasdaq index in the US, with old economy stocks peppering the remainder of the Footsie fallers board.

Biotech AstraZeneca down 155p at £32.40, high-street electronics retailer Dixons off 12½p at 263½p and Imperial Tobacco down 46p at 665p.

Fund manager Amvescap also headed south, dropping 6%, or 90p to £12.20 despite completing its 200m US dollars (£138m) purchase of US investment manager National Asset Management Company.

Those stocks on the way up included support services groups Capita and Hays as well as chemicals giant ICI.

Capita, which announced a series of contract wins yesterday, topped the risers board, sparking 12%, or 51p to 489p.

Hays rose 23p to 328p, while ICI rose 15p to 412p.

On a light day for corporate results, furniture giant DFS slumped despite eporting a record interim profit of £24.4m, roughly in line with the City’s expectations.

The group fell 14p to 406p with analysts blaming a relatively downbeat forward looking statement.

It was a better day, however, for biotech Bioglan Pharma, which posted a healthy p rise to 555p, after a strong set of annual results.

The company, which specialises in skin disease treatments and pain relief, eported pre-tax profits of £12.5m compared to £7m the year before.

The biggest risers were Capita Group, up 51p at 489p, Hays, up 23p at 328p, Electrocomponents, which rose 33p to 605p and Invensys, up 7½p to 148½p.

The heaviest fallers were CMG, down 83p to 360p, Amvescap, off 90p to £12.20, Imperial Tobacco, down 46p to 665p, and Marconi, off 21½p to 343½p.