Footsie suffers as market awaits US interest rates decision

Events across the Atlantic continued to dominate investors' minds in London today as the FTSE-100 tumbled into the red.

By lunchtime the Footsie was off 61.9 points at 5834.9, with tech, telecoms and banking stocks all heading south.

The market was reacting to fears Federal Reserve chairman Alan Greenspan may only slice 25 basis points off US interest rates tomorrow, deciding against a heftier 50 basis point cut.

Significant falls on either the Dow Jones Industrial Average or the Nasdaq Composite could lead to a long afternoon for the Footsie.

Among the heaviest fallers in London this morning were computer services groups Logica, down 37p at 843p, and CMG, off 17½p at 377p. Software firm Sage was off 9p at 261p, while Marconi edged 17½p lower to 353½p and chip designer ARM Holdings was off 11½p at 338½p.

Meanwhile, the hangover from last week's results announcement and credit rating downgrade continued for telecoms giant BT. The stock slipped a further 12p at 514p as stockbroker Schroder Salomon Smith Barney cut its fundamental valuation on BT.

BT rival company Vodafone was also struggling, falling 4p at 199p, but Cable & Wireless rose 3½p to 447p after a £240m deal with US internet service provider Digital Island.

Banks also suffered, with Barclays off 37p at £22.41. Lloyds was down 8½p to 746½p, Royal Bank of Scotland off 13p to £16.74, Bank of Scotland down 6p to 845p and HSBC fell 20½p to 870½p. Abbey rose, however, edging up 4p to £12.90.

In a quiet day for corporate results, Dixons-to-B&Q retail group Kingfisher was down 1¼p at 442¼p, after reports it may sell and leaseback 180 of its Woolworths stores.

Such a move could net the group £600m.

Safeway fared better, however, ahead of its annual results on Wednesday. The group, rejuvenated by chief-executive Carlos Criado-Perez, sparked 4½p to 342p.