Footsie unmoved by BT's record rights issue

British Telecom's record-breaking £5.9bn rights issue has failed to inspire the Footsie index of 100 leading shares.

Shares in BT have slumped by 29p to 539p after it unveiled the cash call alongside widely anticipated plans for a break-up.

The group is also demerging its BT Wireless mobile phones division as part of its drive to wipe up to a third off its debt mountain this year.

The fall in BT's share price reflects a subdued start to trading on the Footsie index, which is down 14.7 points following an hour's trading to stand at 5879.

Investors are sitting on their hands ahead of the Bank of England monetary policy committee's interest rates announcement at noon.

The decision, likely to see a further 0.25% cut in interest rates, could provide a spark this afternoon.

The European Central Bank may also boost sentiment by cutting rates across the eurozone later in the day.

Among those stocks heading south in early trading are household products group Reckitt Benckiser, which has slumped 29½p to 950½p.

Royal & Sun Alliance has dropped 6p to 501p despite recording a 22% increase in profits for the first quarter of this year.

Of those stocks faring better, Shire Pharmaceuticals is up 37p at £11.37 after yesterday announcing that its merger with BioChem Pharma in Canada has finally been approved.