London market holds ground

The London market is holding its ground despite a disappointing session for tech and telecom stocks.

By the close, the FTSE-100 Index was down 8.5 points at 5871.3 after a strong performance from old economy shares averted more substantial falls.

The rearguard action was all the more important because of the knock in confidence caused by a disappointing opening on Wall Street.

Both the Dow Jones Industrial Average and the Nasdaq Composite were in the red as the spate of profit warnings in the US showed no sign of letting up.

Manufacturing giant Honeywell became the latest company to offer a downbeat outlook after the markets closed on Friday.

That did little for the fortunes of tech and telecoms stocks. They were mostly on the back foot as investors also decided to cash-in on last week’s gains.

Chip designer Arm Holdings, which fell by 9%, or 33p to 329p, led the Footsie fallers board.

Other techs in trouble included software groups Misys and Sage, off 29p and 11¼p to 578p and 281p respectively, while computer services group Dimension Data, dropped 3¼p to 288¾p.

Among the telecoms, Energis slumped 21¾p to 309½p, Cable & Wireless fell 25½p to 479½p and Spirent dropped 20p to 419p.

Media group Reuters was also suffering ahead of its keenly awaited trading statement.

The group is just one of several of key blue-chips reporting this week, and although the market is expecting a strong set of numbers, profit-taking saw the stock drop 54p to 975p.

The Footsie fell by 45 points within the first hour of trading, but a solid performance from two of the biggest blue-chips, Shell and BP Amoco, helped peg back the losses early on.

While BP Amoco gained 13p to 620p from the rotation back into defensive stocks, Shell rose after the Australian Government rejected its £3.7bn bid for Woodside Petroleum.

The decision, which surprised the market, eased financing concerns, and saw Shell rise 8p to 574½p.

Other defensive stocks keeping the Footsie on an even keel were Rolls-Royce, ahead 8¼p at 216¾p, Railtrack up 16p at 448½p, and Imperial Tobacco, 23½p stronger at 689½p.

In a light day for corporate results, Anglo-Norwegian biotech Nycomed Amersham sparked 8½p to 485½p after posting a 16% hike in first quarter sales.

Hotels and betting chain Hilton rose initially after unveiling a £612m deal for Swedish hotels group Scandic but was later down three-quarters of a penny at 219¾p.

Elsewhere, food equipment manufacturer Enodis lifted 13%, or 13½p at 117½p, after announcing plans to sell its building and consumer products division to Swedish kitchen makers Nobia for £134 million.

The signing of £19m Dutch striker Ruud van Nistelrooy helped Manchester United recover some of the losses it sustained after being knocked out of the UEFA Champions League last week.

Shares lifted 2%, or 3½p, at 176½p following today’s announcement.

The biggest Footsie risers were Rolls-Royce up 8¼p at 216¾p, Railtrack ahead 16p at 448½p, Imperial Tobacco up 23½p at 689½p and Lattice Group ahead 4¼p at 136¼p.

The biggest fallers were Arm Holdings down 33p at 329p, Energis off 21¾p at 309½p, Celltech Group down 64p at £11.36 and Reuters off 54p at 975p.