London market closed at low point

THE London market closed at its lowest point for more than a month yesterday after being dragged down by hi-tech stocks.

Computer services firm Logica was the biggest faller after the City voiced concern about future revenue growth.

Logica said business was being hit by a decline in the pre-pay mobile phone market and with lower growth forecasts at its mobile networks division, shares tumbled 15%.

Other tech and telecoms followed its lead and the FTSE 100 Index ended the session 45.1 points adrift at 5074.9, its lowest close since the beginning of November.

The market has fallen throughout the week, retreating from a recent rally when it nudged the 5,400 mark, and a poor start on Wall Street today did little to lift flagging spirits.

Tom Hougaard, a trader at City bookies Financial Spreads, said the market could well fall even lower before it turns around.

He added: ‘‘Everything will depend on the US. We have moved into a cycle where the media and traders are focusing on the bad news.

‘‘Nokia could do little to cheer the market and Logica only cemented the downtrend.’’

Logica fell 125p at 705p, while chip designer Arm Holdings closed 33½p weaker at 325p and software group Sage lost 6½p at 225¾p.

Telecoms were also on the slide, with Vodafone losing 3½p at 175½p, fellow mobile phone group mmO2 3¾p behind at 83½p, BT Group down 6p at 250½p and Cable & Wireless off 16¼p at 326p.

Also weighing on the market were media stocks, which were not helped after Daily Mail & General Trust detailed how the events of September 11 had created a marked effect on various parts of its operations.

Shares in DMGT initially fell 3% but eventually closed just 2p lower at 635½p.

Other media stocks dropping lower were BSkyB, down 53½p at 746p, news and information group Reuters, down 30p at 692p and ITV broadcaster Granada, 10p lighter at 136p.

Bucking the market trend was Wolseley, up 17½p at 529p, after the building materials group stuck to its full-year targets and said it had seen sales growth in both the UK and the US in recent months.

And data out today showing high street sales recorded their biggest monthly increase since the millennium celebrations in January 2000 helped retail stocks.

The bumper data came as a surprise to many, who had not been expecting such a large improvement.

It did mean, however, that hopes of another swift interest rate cut faded.

General retailers on the up included Burberry-to-Argos firm GUS, rising 6p to 640p, health and beauty chain Boots, up 13½p at 580½p and Marks & Spencer, 4½p ahead at 355p.

Grocers on the move included Sainsbury, which rose 6½p to 354p. Its larger rival Tesco was up 6½p at 235½p and Morrison Supermarkets gained 4p at 197p.

Among companies reporting news today, FTSE 250 packaging group Rexam fell 23¾p to 351¼p despite a £75m deal to buy a US business which makes fine-mist pumps for perfumes and beauty products.

Rexam is raising £107m through a share placing to fund the deal.

Back in the FTSE 100, the biggest risers were International Power, up 7p at 197p, Wolseley, up 17½p at 529p, Shire Pharmaceuticals, up 26p at 875p and AB Foods, up 14p at 488p.

The heaviest fallers were Logica, down 125p at 705p, Arm Holdings, off 33½p at 325p, ICI, off 29½p at 367p and Granada, down 10p at 136p.