City shares drop heavily as US markets fall

London shares have plunged more than 90 points as traders have taken their lead from a poor opening on the US markets.

Both the Dow Jones Industrial Average and the tech-dominated Nasdaq have slid in early US trading, continuing subdued sentiment at the end of last week.

By the close of trading, the FTSE-100 Index was 90.1 points south at 5860.5, slipping further from the elusive 6,000 mark.

Drops in a mixture of tech, telecoms and banking shares have pulled the market lower.

Techs were hurt by the Nasdaq weakness, with software groups Sage and Misys off 19½p at 289½p and 25p at 570p respectively.

Computer services giant Logica slid 51p to 944p, while CMG was off 18½p at 388½p and Dimension Data slipped 22p to 327p. Among the telecoms, Vodafone was 7p lower at 175p, Colt Telecom fell 28p at 672p and Cable & Wireless was off 16p at 450p.

Abbey National and Lloyds TSB were also suffering as the City began speculating over the content of the Competition Commission's report into the proposed merger of Lloyds TSB and Abbey National.

Lloyds was down 4%, off 33p at 714½p while Abbey was off 6%, down 84p at £12.11, amid forecasts the report - due to be sent to the DTI on Tuesday - was unfavourable and that Lloyds' could abandon its takeover plans.

Other banks under pressure included Far Eastern banks HSBC and Standard Chartered off 24p at 891p and 25p at 985p respectively, while Bank of Scotland slipped 24p to 800p and Halifax lost 24½p to 800p.

Track operator Railtrack was also on the slide, starting its last week as a Footsie stock in poor form, as it fell 5%, off 21½p at 376p. Railtrack will drop out of the Footsie at the end of this week to become a FTSE-250 stock.

TV companies Granada and Carlton Communications also saw shares slip, on fears of a larger-than-expected fall in ITV advertising revenues. Granada, which is to announce its interims on Wednesday, slid 5¼p to 170¾p while Carlton was down 7p at 388p.