Footsie fails to hold on to early gains

Early gains on the Footsie 100 index have evaporated by mid-morning, leaving it down 19.4 points at 5389.3.

The telecoms sector is again bearing the brunt, with Colt Telecom off 10p at 218p; Telewest Communications off 2¾p at 61p; BT dropping 5p to 543p; Cable & Wireless shedding 1p at 319p; and Energis falling 1½p at 75p.

Telecoms equipment maker Marconi is continuing on its downward path, slipping another 1% or ¾p to a new low of 65½p.

A number of banks are also on the way down, with Barclays off 36p at £22.36; Royal Bank of Scotland down 24p at £17.58; Lloyds TSB off 9p at 733p; and Alliance & Leicester, 10p lower at 819p.

Shares in Rolls-Royce initially rose by nearly 4%, but have since fallen back to stand ½p ahead at 216½p. The aero-engine manufacturer, which posted a surprise profits warning last August, has eased investors' nerves by reporting a record order book and a confident outlook.

Other stocks which are holding up include Vodafone, rising 3p to 133½p; and telecoms equipment group Spirent, ahead 2½p at 135¼p.

Software group Sage is ahead 7p at 218¾p; computer services firm Logica is up 16p at 715p; and rival CMG is up 1¾p at 247p.

Among the smaller stocks, life assurance group and estate agent Countrywide Assured has seen its share price rise by 3% or 4p to 123½p after it announced a 30% increase in pre-tax profits.

And car dealership Pendragon is up 5% or 12½p to 265p after it said its decision to trim the number of manufacturers it represents had been rewarded with a rise in half-year profits.